Agilent Technologies, Inc.

Products from Agilent Technologies have a measurable effect on the scientific world. A leading maker of scientific testing equipment, Agilent supplies a slew of analytical and measurement instruments, including oscilloscopes, gas and liquid chromatographs, mass spectrometers, vacuum pumps, anatomic pathology workflows, and nuclear magnetic resonance imaging systems. Its operations include products used in electronic test and measurement, life sciences, chemical analysis, and diagnostics and genomics. Agilent's customers include such global giants as Cisco, Dow Chemical, GlaxoSmithKline, IntelMerck, and Samsung. The company, which gets most of sales outside the US, is spinning off its electronic measurement business.

Operations

Agilent's operating segments are determined by the markets it serves. Its largest segment, electronic measurement, accounts for about 40% of sales and includes instruments and systems used by developers of electronics equipment and microscopy products. This division will be spun off in late 2014 as a separate company to be named Keysight.

The life sciences and diagnostics segment (about 35% of sales) provides lab automation and robotic systems, x-ray diffraction systems, liquid chromatography systems, and liquid chromatography mass spectrometry systems, as well as reagents, instruments, and other products used at the molecular level of clinic and life sciences research.

The chemical analysis segment (about a quarter of sales) includes gas chromatography (GC) systems, gas chromatography mass spectrometry (GC-MS) systems, inductively coupled plasma mass spectrometry (ICP-MS) instruments, atomic absorption (AA) instruments, and molecular spectroscopy instruments, among others.

Geographic Reach

The US remains Agilent's largest single geographic location, accounting for 30% of sales. China and Japan together account for about a quarter of sales. The rest of its international operations are located in Europe and Southeast Asia.

Agilent has manufacturing plants in Australia, China, Denmark, Germany, India, Italy, Japan, Malaysia, The Netherlands, Poland, Singapore, the UK, and the US.

Sales and Marketing

The company sells most of its products directly, although it also relies on resellers, distributors, e-commerce, and other channels to a lesser degree. It also has a pretty diverse customer base -- 46,000 customers for its life sciences and diagnostics business, 37,000 customers for its chemical analysis business, and 14,000 customers for electronic measurement products.

Financial Performance

Being a leader has not spared the company from tough times, but it has made Agilent flexible enough to expand its operations, even while recovering from the effects of economic and industry downturns on sales and profits. In fiscal 2013 (ended October) Agilent's sales were $6.7 billion, down 1% over 2012. The slight decrease was due to a 13% drop in the electronic measurement business, offset by growth in the life sciences and diagnostics segment and chemical analysis divisions.

Agilent has only had one unprofitable year in the past decade (in 2009). In 2013 profits fell 37% to $724 million after it did not enjoy the same income tax benefit for deferred US federal taxes that it did in 2012. Despite the slight decrease in sales, the company invested more in R&D in 2013, which contributed to increased expenses.

Along those same lines, cash flow from operating activities also dipped slightly in 2013 to $1.15 billion, down from $1.2 billion in 2012 due to taxes.

Mergers and Acquisitions

Agilent makes acquisitions both large and small to grow its product portfolio and expand its footprint into new geographic regions. In 2014 it added electrothermal analysis technology to the lineup with the purchase of HeatWave software from California-based Gradient Design Automation. (Electrothermal analysis technology allows designers to identify and correct thermal problems during IC development.) Looking to grow its footprint in the Mexican analytical market, in 2013 it bought assets from Agilent distributor ABC Instrumentation Analitica (ABCIA).

In 2012 the company completed the largest deal in its history, the $2.1 billion purchase of Dako, a Danish maker of cancer diagnostic tools. The acquisition is part of Agilent's strategy to build its presence in the life sciences sector with complementary research products while growing its base of recurring revenues.

Also that year Agilent boosted its Asian semiconductor device modeling capabilities when it bought Beijing-based modeling and validation software company Accelicon Technologies. Later that year Agilent bought the wireless test portfolio of Spanish wireless communications testing services provider AT4 wireless, whose other businesses -- testing and certification services and IT services -- were not part of the purchase.

During 2011, Agilent paid a total of $96 million for three separate businesses. UK-based Lab901 added electrophoresis equipment and consumables used in microbiology and a customer base that includes the research and development and quality control divisions of pharmaceutical makers, academic institutions, and government agencies. The acquisition of US-based Biocius Life Sciences added mass spectrometry drug-screening products sold to pharmaceutical and biopharmaceutical customers under the RapidFire brand. The purchase of A2 Technologies expanded Agilent's spectroscopy business with Fourier transform infrared (FT-IR) spectrometers used in the aerospace, art conservation, environmental, geosciences, and petrochemical industries.

Prior to Dako, the largest deal in Agilent’s history was the transformation 2010 acquisition of Varian, a maker of instruments for measuring biological and physical attributes, for about $1.5 billion in cash. The purchase diversified the company’s product portfolio into such fields as nuclear magnetic resonance and imaging and vacuum technology, which target the life sciences, environmental, and energy industries.

Strategy

Along with its frequent acquisitions, Agilent also remains nimble through divestitures. Its plan to spin off the electronic measurement business as Keysight reduces its exposure to the cyclical electronic measurement industry. The remaining businesses will keep the Agilent name and will be able to better focus its financial and management resources on growth.

In 2010 it sold its Network Solutions business (including network protocol test and drive test products) to JDS Uniphase (JDSU) for $165 million in cash. Also that year it sold its Hycor Biomedical subsidiary. Hycor, which manufactures in vitro diagnostics products, was deemed noncore to Agilent's life sciences business. The division was acquired by Linden, a Chicago-based private equity health care firm.

In the meantime, Agilent has continued to invest about 10% of its revenue in research and development. The company spent more than $700 million in 2013 on R&D to develop new products or make product improvements.

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Agilent Technologies, Inc.


5301 Stevens Creek Blvd
Santa Clara, CA 95051-7201
Phone: 1 (408) 345-8886
www.agilent.com

STATS


  • Employer Type: Public
  • Stock Symbol: A,
  • Stock Exchange: , NYSE
  • Non-executive Chairman: James Cullen
  • Senior Vice President, Chief Financial Officer: Didier Hirsch
  • President and Chief Executive Officer; Director: William Sullivan

Major Office Locations

  • Santa Clara, CA

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