Agilent Technologies' Spin-Off: What's In It For You?

Oct. 25, 2013 12:31 AM ETAgilent Technologies, Inc. (A)ABBV, ABT
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Agilent Technologies (NYSE:A), a worldwide provider of bio-analytical and electronic measurement solutions and services, recently announced its plan to separate the company into two publicly traded companies. On September 19, 2013, the board of directors approved the spin-off of the company's Electronic Measurement Group, or EMG, and the life sciences, diagnostics and applied markets, or LDA, businesses.

Management feels the two segments need a focused approach for greater growth and shareholder returns. Also, the conglomerate's diverse businesses make it difficult for investors to understand the value proposition of the company. Therefore, we start with understanding the company's business model, and later we will discuss the implication of separation for investors.

Business overview

Business

Description

Electronic Measurement

  1. General purpose test market: The general purpose test instruments are used by engineers in research and development laboratories and manufacturing units for measuring voltage, current, frequency, signal pulse width, and other standard electronics measurements. The company also offers high-quality electronic devices used in aerospace, defense, and semiconductor industries.
  1. Communications test market: The company markets communication test products and services to handset manufacturers, network equipment providers, and communication services providers. The company's test and measurement device facilitates the transmission of voice and data traffic, and its major clients include companies like Cisco and Samsung.

Life Science, Diagnostic, and Chemical Analysis

  1. Life Sciences: Within the life science market, the company focuses on the pharmaceutical analysis tools that are required to develop and manufacture drugs.
  1. Diagnostic: The company markets a wide range of bio-analytics products that help customers increase their productivity through high quality data that enable fast decision-making processes.
  1. Chemical analysis: Through the chemical analysis devices, the company caters to various markets like petrochemical, environment, security and forensic, food safety, and bio-agriculture.

Current performance

Due to the soft communication sector demand and

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