Agilent to Sell Unit for $2.66B, Cut Jobs
Another 1300 jobs gone.
iWon News
Aug 15, 9:03 AM (ET)
PALO ALTO, Calif. (AP) - Agilent Technologies Inc. (A) on Monday said it will sell its chip unit to two buyout firms for $2.66 billion, as well as sell and spin off other assets and cut 1,300 jobs as part of a restructuring program.
The Palo Alto-based maker of electronic test and measurement products plans to use proceeds from the deals for a $4 billion share repurchase program.
Kohlberg Kravis Roberts & Co. and Silver Lake Partners said their purchase of Agilent's chip business will create the largest privately held independent semiconductor company in the world. The companies said they are equal partners in the deal.
As part of the restructuring, Agilent, also said it agreed to sell its 47 percent stake in San Jose, Calif.-based lighting company Lumileds to Royal Philips Electronics for $950 million plus $50 million in debt and spin off its SOC and memory test businesses. The deal will give Amsterdam-based Philips a controlling stake of 96.5 percent of Lumileds altogether, while Lumileds employees will own the remaining 3.5 percent.
Lumileds had sales of $324 million and operating profit of $83 million over the last 12 months, Philips said.
Agilent said the divestitures and other actions will enhance its focus on measurement operations while creating value for shareholders.
The company said it will use the cash proceeds for a $4 billion share repurchase program, and it will call its $1.15 billion convertible debt. The repurchase will begin immediately, while the call is expected to cut its outstanding shares by 36 million.
The company said it plans to cut its global infrastructure costs by $450 million and eliminate about 1,300 in related jobs through the divestiture and spin-off, as well as attrition and a work force reduction. Agilent did not disclose in a press release how many of the jobs would be eliminated through direct cuts.
Agilent said it expects the restructuring to be mostly completed by the middle of fiscal 2006, while the divestitures are expected to close by Oct. 31, subject to regulatory approval and other closing conditions. The company said it anticipates about $200 million in restructuring costs to be largely offset by proceeds of its asset sales.
Agilent also said fiscal third-quarter earnings rose to $104 million, or 21 cents per share, from $100 million, or 20 cents per share, a year earlier. Excluding charges, tax benefits and other items, the company earned $142 million, or 28 cents per share, down from $154 million, or 30 cents per share, last year.
Revenue fell 10 percent to $1.69 billion from $1.89 billion last year, just below its expectations of $1.7 billion to $1.8 billion.
Analysts expected the company to earn 26 cents per share on revenue of $1.74 billion.
Agilent said it still expects fiscal fourth-quarter operating earnings of 33 cents to 38 cents per share, excluding items, on revenue of $1.79 billion to $1.89 billion. Analysts expect a fourth-quarter profit of 34 cents per share on $1.85 billion in revenue.
iWon News
Aug 15, 9:03 AM (ET)
PALO ALTO, Calif. (AP) - Agilent Technologies Inc. (A) on Monday said it will sell its chip unit to two buyout firms for $2.66 billion, as well as sell and spin off other assets and cut 1,300 jobs as part of a restructuring program.
The Palo Alto-based maker of electronic test and measurement products plans to use proceeds from the deals for a $4 billion share repurchase program.
Kohlberg Kravis Roberts & Co. and Silver Lake Partners said their purchase of Agilent's chip business will create the largest privately held independent semiconductor company in the world. The companies said they are equal partners in the deal.
As part of the restructuring, Agilent, also said it agreed to sell its 47 percent stake in San Jose, Calif.-based lighting company Lumileds to Royal Philips Electronics for $950 million plus $50 million in debt and spin off its SOC and memory test businesses. The deal will give Amsterdam-based Philips a controlling stake of 96.5 percent of Lumileds altogether, while Lumileds employees will own the remaining 3.5 percent.
Lumileds had sales of $324 million and operating profit of $83 million over the last 12 months, Philips said.
Agilent said the divestitures and other actions will enhance its focus on measurement operations while creating value for shareholders.
The company said it will use the cash proceeds for a $4 billion share repurchase program, and it will call its $1.15 billion convertible debt. The repurchase will begin immediately, while the call is expected to cut its outstanding shares by 36 million.
The company said it plans to cut its global infrastructure costs by $450 million and eliminate about 1,300 in related jobs through the divestiture and spin-off, as well as attrition and a work force reduction. Agilent did not disclose in a press release how many of the jobs would be eliminated through direct cuts.
Agilent said it expects the restructuring to be mostly completed by the middle of fiscal 2006, while the divestitures are expected to close by Oct. 31, subject to regulatory approval and other closing conditions. The company said it anticipates about $200 million in restructuring costs to be largely offset by proceeds of its asset sales.
Agilent also said fiscal third-quarter earnings rose to $104 million, or 21 cents per share, from $100 million, or 20 cents per share, a year earlier. Excluding charges, tax benefits and other items, the company earned $142 million, or 28 cents per share, down from $154 million, or 30 cents per share, last year.
Revenue fell 10 percent to $1.69 billion from $1.89 billion last year, just below its expectations of $1.7 billion to $1.8 billion.
Analysts expected the company to earn 26 cents per share on revenue of $1.74 billion.
Agilent said it still expects fiscal fourth-quarter operating earnings of 33 cents to 38 cents per share, excluding items, on revenue of $1.79 billion to $1.89 billion. Analysts expect a fourth-quarter profit of 34 cents per share on $1.85 billion in revenue.
posted by Brian | 6:30 AM
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