SANTA CLARA, Calif. (AP) -- Scientific instrument maker Agilent Technologies Inc. said Thursday that it plans to spin off its electronic measurement business into a new publically traded company.
The news pleased investors and Agilent shares rose $4.08, or 8.5 percent, to $53.40 in premarket trading. The stock closed Wednesday at $49.32, up more than 20 percent since the start of the year.
The remaining company, which will keep the Agilent name, will be focused on life sciences, diagnostics and applied markets.
Agilent President and CEO William Sullivan said Agilent has evolved into two distinct investment and business opportunities and that the split will allow both of them to maximize growth.
The plan calls for Agilent shareholders to receive a pro-rated distribution of the new company's shares as a tax-free spinoff.
Santa Clara, Calif.-based Agilent, which was itself spun off from Hewlett-Packard Co. in 1999, has had five major spin offs since 2005. After this spinoff is complete, the remaining company is expected to post fiscal 2013 revenue of $3.9 billion. Sullivan will remain as its president and CEO. Didier Hirsch continues as CFO.
Meanwhile, the new electronic measurement company is expected to post fiscal 2013 revenue of $2.9 billion. Ron Nersesian, Agilent's president and chief operating officer, was tapped as president and CEO-designate of the new company. Neil Dougherty, Agilent's vice president and treasurer, was designated as the CFO.
The company hopes to complete the spinoff by the end of calendar 2014, pending regulatory and other approvals. The spinoff isn't expected to affect Agilent's guidance for fiscal year 2013, though the company does expect to incur one-time charges related to the deal during the periods leading up to the split.
Separately, Agilent said it has combined its life sciences group with its diagnostics and genomics business, and named Lars Holmkvist the new group's president. The group will remain part of Agilent after the split.
Also on Thursday, Agilent said its board approved a quarterly dividend of 12 cents. The dividend will be paid on Oct. 23 to shareholders of record as of Oct. 1.