Agilent to spin off electronic measurement business
(Reuters) - Agilent Technologies Inc (A.N) will spin off its slowing electronic measurement business into a public company by the end of next year to focus on its fast-growing healthcare business.
Shares of Agilent, carved out of Hewlett-Packard Co (HPQ.N) in 1999, rose as much as 8 percent on the New York Stock Exchange in early trading.
The yet unnamed electronic measurement company will provide electronic test and measurement equipment, including oscilloscopes, power meters and sensors used in the communications, aerospace and defense, and industrial markets.
The business, which brings in about 40 percent of Agilent's revenue, has seen sales decline over the past several quarters due to lower U.S. defense spending and a weak communications market, particularly in wireless handset manufacturing.
The deal will allow Agilent to focus on its life sciences, diagnostics and chemical analysis business, where it has been steadily expanding to offset the impact of the cyclical nature of its electronic measurement operations.
Investors have different criteria, timeline and valuation metrics for the two businesses, said Agilent Chief Executive William Sullivan.
These differences have limited the growth in Agilent's share price and valuation, Sullivan said on a conference call.
Agilent bought Danish cancer diagnostics firm Dako for $2.2 billion last year and scientific-equipment maker Varian Inc for $1.5 billion in 2010.
Sullivan will continue to lead the Agilent, which expects revenue of about $3.9 billion in fiscal 2013.
Agilent Chief Operating Officer Ron Nersesian is the CEO-designate of the company to be spun off, which is estimated to record revenue of about $2.9 billion.
Shareholders of Agilent, which had a market capitalization of $16.3 billion as of Wednesday, will receive a pro rata distribution in the measurement company.
Santa Clara, California-based Agilent shares, which have gained about 20 percent this year, jumped to $53.20 on Thursday.
The stock was up 5 percent at $51.86 in late morning trading.
(Reporting by Esha Dey in Bangalore; Editing by Joyjeet Das)