Agilent to sell chip unit, lighting stake for $3.6 bn

Private equity firms Kohlberg Kravis Roberts & Co and Silver Lake Partners will pay about $2.66 billion for the semiconductor business, while the Netherland’s Royal Philips Electronics will buy out Agilent’s 47 per cent stake in Lumileds Lighting to for about $950 million, plus the repayment of about $50 million of debt from Lumileds.

Agilent also plans to spin off its system-on-chip and memory test business at some point in 2006.

Using proceeds from these transactions, Agilent, spun off from Hewlett-Packard Co in 1999, plans to embark immediately on a $4 billion stock repurchase programme. It will also call its $1.15 billion convertible bond debenture, potentially reducing shares outstanding by 36 million.

Agilent at the same time said net income rose to $104 million, or 21 cents per share, in the third quarter ended on July 31 from $100 million, or 20 cents per share, in the year-earlier period.

Due to lower costs, net income rose even as revenue declined 10 per cent — to $1.69 billion from $1.89 billion. Orders were up 1 per cent versus a year ago at $1.80 billion.