Agilent to Separate Into Two Publicly-Traded Cos.

Agilent Technologies Inc. (NYSE: A) today announced plans to separate into twopublicly traded companies: one in life sciences, diagnostics and appliedmarkets (LDA) that will retain the Agilent name, and the other that will becomprised of Agilent's current portfolio of electronic measurement (EM)products. The separation is expected to occur through a tax-free pro rataspinoff of the EM company to Agilent shareholders.“Agilent has evolved into two distinct investment and business opportunities,and we are creating two separate and strategically focused enterprises toallow each to maximize its growth and success,” said William (Bill) Sullivan,Agilent president and CEO.“Agilent's history is one of reinvention, starting with our own separationfrom HP and including four major spinoffs since 2005. We are once again makinga bold move, as we have done many times in the past, to ensure a future ofsustainable growth for both the LDA and EM companies,” he said. “We arefocused on making this transition seamless for our customers.”BenefitsAgilent believes that the separation will result in material benefits to thestandalone companies: * Greater management focus on the distinct businesses of LDA and EM * Ability for the LDA company to devote resources to the higher-growth LDA business, while reducing exposure to the more cyclical EM industry * Ability for the EM company to devote resources to its own growth that were previously used to capitalize LDA * Two independent and unique investment profiles * Both companies will be well capitalized, having strong balance sheets and investment-grade profiles with target debt-to-EBITDA ratios below 2.0xThe New AgilentThe new Agilent will be a global leader in life sciences, diagnostics andapplied markets, with an attractive recurring revenue base, balancedgeographic revenue profile, growth opportunities in emerging markets,molecular diagnostics and clinical markets, and significant margin-expansionopportunities. FY13 estimated revenues are $3.9 billion. It is expected thatthe new Agilent will continue to pay a dividend at least at the present yield.Bill Sullivan is president and CEO of Agilent, and Didier Hirsch continues asCFO.EM CompanyThe new EM company will be the world's premier electronic measurement company,with a leading position in major markets including communications; aerospaceand defense; and industrial, computers and semiconductors. FY13 estimatedrevenues are $2.9 billion. The EM company initially is not expected to pay adividend.Ron Nersesian, who has been Agilent's president and chief operating officer,is executive vice president of Agilent and president and CEO-designate of thenew EM company, effective immediately. Neil Dougherty, who has been Agilent'svice president and treasurer, is vice president of Agilent and CFO-designateof the new EM company.“The board and I believe Ron is the right leader for the new company,” saidSullivan. “He has an excellent track record of running this business, and hehas the vision and expertise to position the new company for acceleratedgrowth and success.”Transaction DetailsThe Agilent board of directors granted initial approval to pursue theseparation plan at its meeting on Sept. 18.Under the plan, Agilent shareholders will receive a pro rata distribution ofshares in the new EM company via a tax-free spinoff. Although there is noassurance that the separation will be completed within this timeframe, thetransaction is targeted to be completed by the end of calendar 2014, subjectto the satisfaction of closing conditions, including, among others, obtainingfinal approval from the Agilent board of directors, satisfactory completion offinancing, receipt of tax opinions, receipt of favorable rulings from theInternal Revenue Service, the effectiveness of a Form 10 filing with theSecurities and Exchange Commission, and satisfying foreign regulatoryrequirements.The spinoff is not anticipated to impact Agilent's guidance for fiscal year2013. The company is expected to incur one-time charges related to thetransaction during the periods preceding the separation, to be quantified at alater date.