SANTA ROSA — Santa Rosa will soon be home to a multi-billion-dollar international electronics measurement technology company following Agilent Technologies’ (NYSE: A) decision to spin off the division that is headquartered in the North Bay, company officials said.
Agilent will rename the electronic measurement spinoff, which will maintain its current headquarters in Santa Rosa, said division president Guy Séné. The remaining company will retain the name “Agilent” and focus on life sciences and diagnostic medical technology.
Thursday’s spinoff announcement came nearly 15 years after Agilent’s own spinoff from Hewlett Packard, and follows what Agilent chief executive William Sullivan called an increasing evolution towards “two distinct investment and business opportunities.”
“The big change is that now, going forward, we will have a clear leader who is passionate about electronic measurement,” Mr. Séné said.
Focused on technology that measures wireless signal frequency and hard-wired data networks, the electronic measurement division has a total of 9,500 employees and projected revenue of $2.9 billion for the fiscal year ending Oct. 31. Around 1,200 of those employees are based in Santa Rosa.
The life science division, meanwhile, has around 11,500 employees and projected revenue of $3.9 billion for the fiscal year. It focuses on technology for advanced medical imaging devices, chemical analysis and genetics.
Agilent cited the ability to independently manage the two operations as a driver of the decision, noting that the two divisions will now be more focused on devoting revenue back towards their own operations instead of capitalizing other operating groups.
The electronic measurement group most recently reported a 17 percent decrease in third-quarter revenue compared to the same period in fiscal year 2012, but an 18.5 percent operating margin that topped the company as a whole. Agilent reported a total of $1.65 billion in revenue for that quarter, down 4 percent from the prior year but higher than analyst expectations.
Those sales were still significantly higher than the same quarter in 2009. Agilent’s company-wide quarterly revenue has increased 50 percent since that period. In the electronic measurement division, quarterly revenue of $701 million represented a 33.8 percent increase over the same period.
Yet the weakness in revenues in the second quarter of the 2013 fiscal year had pushed the company to lay off 450 workers — 2 percent of its workforce — this year. The last major round of layoffs for Agilent was from 2008 through 2009, when the company reduced its total workforce by more than 3,000.
Mr. Séné said that staffing levels for the new company were likely to remain stable during this early period. Further executive leadership is likely to move to the Santa Rosa headquarters in the coming months, parallel with the formation of a new board of directors that is already underway.
Bill Sullivan will remain CEO of Agilent, and Didier Hirsch continues as chief financial officer. Ron Nersesian, Agilent’s executive vice president, will serve as CEO of the new company. Neil Dougherty, vice president at Agilent, will serve as CFO. Mr Séné will continue his role as president.
Agilent’s board of directors granted initial approval for the plan on Sept. 18. Agilent shareholders will receive a distribution of shares in the new spinoff, a transaction that is structured to be tax-free.
The separation is targeted for completion by the end of 2014. Agilent does not expect the move to impact its 2013 projections, but anticipates one-time fees that will be reported at a later date.
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