Agilent Technologies Inc. A announced that it has entered into a definitive agreement with Rigaku Corp., a provider of analytical and industrial instrumentation technology. Per the deal, Agilent will sell its X-ray diffraction (XRD) business to Rigaku.
XRD was previously known as Oxford Diffraction and owned by Varian. It was acquired by Agilent as part of the Varian acquisition in 2010. The XRD unit manufactures single-crystal X-ray instruments for the global chemical crystallography market. The financials of the deal have not been disclosed and the deal is expected to close by May 1 depending on local laws and customary closing conditions.
Following the closure of the deal, Rigaku plans to integrate XRD into its existing crystallography business to build a new business unit. XRD products will be developed and produced at existing factories in Poland and Japan.
Rigaku is a Tokyo based privately-held analytical and industrial instrumentation technology firm founded in 1951. The company along with its subsidiaries focuses on general-purpose analytical instrumentation and life sciences. Rigaku specializes in X-ray spectrometry, X-ray diffraction, non-destructive testing, X-ray microscopy, Raman spectroscopy and optics, as well as small molecule and protein crystallography and semiconductor metrology.
Agilent has been restructuring its business for quite some time now. It’s most recent actions include the 2014 spin-off of its electronic measurement segment into a new company named Keysight Technologies KEYS, making it an independent, publicly traded company.
It also exited its Nuclear Magnetic Resonance (NMR) business since it failed to meet growth and profitability goals. It had started the NMR business in 2010, with the purchase of Varian.
The company has been divesting or winding up underperforming units to rationalize its operations. This seems to have worked in its favor. It has enhanced focus on the new Agilent and is enabling management to build a solid base of recurring revenues and diversify geographic and industrial operations to achieve growth. We expect the latest move to benefit the company in a similar way.
Agilent carries a Zacks Rank #3 (Hold). Better-ranked stocks include LivePerson Inc. LPSN and United Online, Inc. UNTD, both sporting a Zacks Rank #1 (Strong Buy).
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