The board of directors of Agilent Technologies Inc. (A) has consented to the spinoff of its electronic measurement subsidiary Keysight Technologies Inc. Agilent also announced that Keysight’s outstanding common stock would be distributed to Agilent’s shareholders as a special dividend distribution.
Per the board’s announcement, on the expected distribution date of Nov 1, 2014, Agilent shareholders will be entitled to receive one share of Keysight for every two shares of Agilent they own. No fractional shares of Keysight will be offered and the shareholders will be given cash instead.
The distribution of Keysight’s outstanding common stock will complete the official spinoff of the Electronics Measurement (EM) segment from Agilent, making it an independent, publicly traded company. Following the spinoff, Keysight will commence regular trading on the New York Stock Exchange under the ticker "KEYS", while Agilent will continue to trade as “A”. Keysight will be headquartered in Santa Rosa, CA with over 9,500 employees in 30 countries and will focus on the semiconductor testing side of the business.
Agilent will not hold any ownership post spinoff. The spin-off of EM is expected to be completed around Nov 1, 2014. Following the spin-off, Agilent will consist of its Life Science, Chemical Analysis, and Diagnostics and Genomics businesses ("LDA") only.
In Sep 2013, Agilent announced the separation of its EM business into two tax-free publicly traded companies. On Aug 1, 2014, the EM segment started operating as Keysight Technologies, Inc., a wholly-owned subsidiary.
The company continues to do well in the Life Sciences and Chemical Analysis segments and its decision to divest the underperforming EM business makes perfect sense under the circumstances. The separation will enable management of both companies to focus on their respective growth opportunities.
This enhanced focus on the new Agilent will enable management to expand a solid base of recurring revenues and diversify geographic and industrial operations to achieve opportunities in several fast-growing emerging markets.
Separately, Agilent announced a quarterly dividend of 13.2 cents per share to be paid on Oct 22, 2014, to stockholders of record as of the closure of business on Sep 20. It also declared that its Chief Executive Bill Sullivan will retire in Mar 2015 and will be succeeded by Mike McMullen, the senior vice president at Agilent and president of its Chemical Analysis Group.
Agilent shares carry a Zacks Rank #3 (Hold). Better-ranked stocks include Ametek Inc. (AME), National Instruments Corporation (NATI) and Cognex Corporation (CGNX). All these stocks carry a Zacks Rank #2 (Buy).
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