Skip to main content
Premium Trial:

Request an Annual Quote

UPDATE: Agilent to Offer Senior Notes; Fitch Rates Offering BBB+

The story has been updated with information about the pricing of the notes released by Agilent after the close of the market.

NEW YORK (GenomeWeb News) – Agilent Technologies today announced it is offering a series of senior notes, partly to fund its restructuring initiative and expand its share buyback program.

Separately, Fitch Ratings assigned a BBB+ rating to the offering.

After the close of the market on Tuesday, Agilent said it is offering $600 million in aggregate principal amount in senior notes, which will mature in July 2023 and bear interest at an annual rate of 3.875 percent. The offering is expected to close on June 21.

Net proceeds will go toward repaying its outstanding senior notes due July 15. In a preliminary prospectus Agilent said the outstanding notes bear interest at a rate of 2.50 percent annually. It owes $250 million in principal on the notes as of May 31.

The company announced last month a restructuring effort expected to result in 450 layoffs, as well as an additional $500 million to its existing share buyback program. It said today that proceeds from the offering will also be used for general corporate purposes, including the payment of costs related to the restructuring program and the share buyback program.

BNP Paribas Securities; Citigroup Global Markets; Merrill Lynch, Pierce, Fenner & Smith; and Deutsche Bank Securities are joint book-running managers on the offering.

As of April 30, Agilent had $2.52 billion in cash and cash equivalents, the firm said.

Following Agilent's announcement, ratings agency Fitch issued a BBB+ rating on the offering and said that the rating outlook for the firm is positive. Fitch also rated the company's $2.8 billion of debt BBB+ in April.

In a statement, Fitch noted Agilent's improving operating profile resulting from revenue diversification and an expected mid-cycle annual free cash flow approaching $1 billion. The ratings and outlook also reflect the company's conservative financial policies, Fitch said.

Fitch said that it expects Agilent's revenue to be flat in fiscal 2013. Emerging market demand and its Dako acquisition should offset lower US government spending, a European recession, and "more volatile communications order patterns." Emerging markets and increasing recurring revenues are expected to fuel mid-single digit revenue growth in the mid- to longer-term, it added.

The Dako purchase, Fitch noted, further diversified Agilent's revenue portfolio and increased its capabilities and customer reach in the cancer diagnostics arena. "Dako also expands Agilent's recurring revenues to 30 percent from 25 percent of total" revenues, Fitch said.

As Agilent continues to focus on the higher growth bioanalytical markets, its exposure to the more volatile Electronics Measurement segment will likely recede, and in fiscal 2013, Fitch said, EM should make up less than 45 percent of total revenues, down from almost 55 percent five years ago.

Fitch also said that the company's "commitment to high levels of" R&D investments should "support the company's technology leadership and high retention rates of its significant installed based." R&D spending is anticipated to remain at about 10 percent of revenues, down "slightly" from historical levels but still above that of competitors, Fitch said.

The Scan

Gone, But Now Reconstructed SARS-CoV-2 Genomes

In a preprint, a researcher describes his recovery of viral sequences that had been removed from a common database.

Rare Heart Inflammation Warning

The Food and Drug Administration is adding a warning about links between a rare inflammatory heart condition and two SARS-CoV-2 vaccines, Reuters reports.

Sandwich Sampling

The New York Times sent tuna sandwiches for PCR analysis.

Nature Papers Describe Gut Viruses, New Format for Storing Quantitative Genomic Data, More

In Nature this week: catalog of DNA viruses of the human gut microbiome, new dense depth data dump format to store quantitative genomic data, and more.