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Agilent Semiconductor Unit Reportedly for Sale; Will Focus on Core Businesses

Agilent is reportedly seeking a buyer for its semiconductor business, a move that would allow it to shed a laggard among its divisions and focus on its more profitable test and measurement group and life sciences and chemical analysis business.

According to the Wall Street Journal, the firm has hired investment bank Goldman Sachs Group to find a buyer.

Agilent would not confirm the report or whether it had engaged Goldman Sachs, and officials did not return a request for comment from BioCommerce Week.

The sale of the semiconductor business would not be a big surprise. Agilent officials have hinted on at least a couple of occasions recently that business units unable to meet certain long-term financial goals would be under review for possible divestiture. And at the JP Morgan Technology Conference last month CFO Adrian Dillon said the semiconductor business wasn’t core to the company.

While Agilent is not known primarily for its life sciences business — it lacks best-in-class products — the LSCA unit had consistently returned double-digit quarterly revenue growth for six consecutive quarters. That run ended with the most recent quarter, when the LSCA unit reported quarterly revenue growth of 3 percent to $344 million. While certainly not spectacular results, the unit outshined the firm’s overall performance: a 5-percent decline in second-quarter revenue to $1.7 billion.

The semiconductor business unit posted a 9-percent decline in revenue to $414 million in the most recent quarter.

The LSCA unit has grown from accounting for 11 percent of Agilent's revenues in 2000, and operating at break-even levels, to providing an expected 20 percent of total revenues in FY '05, which ends in October.

Chris van Ingen, the head of the LSCA unit, told BioCommerce Week in March that the firm needs to get Wall Street to pay closer attention to the performance of that business (see BioCommerce Week 3/10/2005).

In the molecular biology tools sector, Agilent's microarray business is regarded as the No. 2 player, behind Affymetrix, and the company is also on the second tier in the mass-spectrometry field. With the January acquisition of Cambridge, Mass.-based Computational Biology and the acquisition of Silicon Genetics in August, the LSCA unit also is clearly making an informatics play.

Edward Winnick ([email protected])

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