24/7 Wall St. » VARI

Agilent-Varian, Partly Transformational Move (A, VARI)

247wallst — Mon, 27 Jul 2009 13:32:15 +0000

Agilent Technologies Inc. (NYSE: A) is making what seem an unusual acquisition. It is acquiring Varian, Inc. (NASDAQ: VARI) after signing a definitive agreement for the acquisition. Agilent will pay roughly a 35% premium of $52.00 per share in cash for Varian’s outstanding stock, which comes to a price tag of roughly $1.5 billion. Both Agilent’s and Varian’s Board of Directors have unanimously approved the acquisition.

This may seem a strange acquisition on the surface when you consider Agilent’s history. Agilent provides bio-analytical and electronic measurement solutions to the communications, electronics, life sciences, and chemical analysis industries. But in its history most have thought of it in the communications and electronics sectors. Varian is supplier of scientific instrumentation and associated consumables for life science and applied market applications. This acquisition will broaden Agilent’s offerings in life sciences, environmental, and energy and materials. Specifically, this merger will expand Agilent’s product portfolio into atomic and molecular spectroscopy, establishes a leading position in NMR, imaging and vacuum technologies, and strengthens its consumables portfolio.

But this is also, according to CEO Bill Sullivan, “…a major step in Agilent’s transformation into a leading bio-analytical measurement company… While we continue to be a world leader in electronic measurement, our biggest opportunities for future growth are in bio-analytical measurement.” The company also believes this merger will make Agilent into a market leader in analytical solutions. The transaction is expected to generate $75 million in annual cost synergies and achieve Agilent’s 20% return on invested capital target within four to five years.

The transaction is subject to approval by the shareholders of Varian and will be completed after achieving customary closing conditions and regulatory approvals, which Agilent expects before calendar year-end. The transaction is not subject to any financing conditions.

It is not hard to see how Agilent and Varian came up with a price that is certain to receive shareholder approval. Varian’s $52.00 price tag compares to a $39.20 close, and its 52-week trading range was $19.83 to $51.98.

Varian generated $1.01 billion in its fiscal 2008 sales and we have analysts looking for more than $850 million in sales this year. Without the consideration of this merger, we have analysts looking for $4.36 billion in sales this year. Agilent had 2008 sales of $5.774 billion. So while the revenue diversification is coming, this will add less than one-fifth in new revenues on a trailing basis and on an expected basis.

Agilent shares are down nearly 3% at $21.64 in early trading on the announcement. Its 52-week range is $12.02 to $37.25 and its market cap as of Friday’s close was $7.65 billion. Varian shares are up 29% at $50.70.

Jon C. Ogg
July 27, 2009

Posted in Mergers and Buy Outs Tagged: A, VARI

Top 10 Pre-Market Analyst Calls (A, BBBY, BBY, DTV, ECL, EP, IBM, NTAP, LRCX, MOT, CRM)

247wallst — Thu, 28 Feb 2008 08:08:14 +0000

These are not all of the calls affecting stocks, but these are the top analyst calls that 247WallSt.com is looking at this Thursday morning:

Blockbuster (NYSE: BBI) raised to Overweight at JPMorgan.
Borg Warner (NYSE: BWA) cut to Neutral at JPMorgan.
Boyd Gaming (NYSE: BYD) cut to Underweight at KeyBanc.
CDC Corp. (NASDAAQ: CHINA) started as Buy at Cantor Fitzgerald.
Chimera (NYSE: CIM) started as Neutral at JPMorgan.
Lear (NYSE: LEA) cut to Neutral at JPMorgan.
RF Micro Devices (NASDAQ: RFMD) downgraded to Hold at Jefferies.
Sotheby’s (NYSE: BID) raised to Outperform at JMP Securities.
Western Digital (NYSE: WDC) and Seagate (NYSE: STX) were both cut to Hold from Buy at Citigroup.
Varian (NASDAQ: VARI) raised to Buy at UBS.

Jon C. Ogg
February 28, 2008

This Week’s Key Stock Buybacks & Repurchases (SYK, NILE, TDC, WW, CPWR, CE, EFX, VARI)

247wallst — Fri, 15 Feb 2008 13:15:56 +0000

While earnings season is slowly winding down and while the economy is obviously cooling, we still have many large and small companies alike with solid balance sheets or that have extra cash to deploy on hand. These are some of the key share buybacks we have seen this week.

Stryker (NYSE: SYK) announced a general $750 million for share buybacks for general corporate purposes and to offset dilution from options. This is one of the larger buyback plans announced, but it is small in comparison to its market cap of $27.93 billion.

Blue Nile (NASDAQ: NILE) approved a $100 million share buyback. With its poor guidance, buybacks may only partially help a growing problem. The current market cap sits at about $688.11 million.

Teradata (NYSE: TDC) announced a $250 million stock buyback plan. With positive 2008 guidance, future earnings per share should grow. The current market cap is $4.27 billion.

Watson Wyatt (NYSE: WW) announced a $100 million stock buyback plan. The company noted that the buybacks will help offset dilution from employee benefit plans. Its current market cap is $2.21 billion

Compuware (NASDAQ: CPWR) announced a $750 million buyback plan to reduce the balance of outstanding common shares to 200 million. They currently have 281.4 million shares outstanding. The current market cap is $2.27 billion.

Celanese (NYSE: CE) Board approved a $400 million share buyback. The CEO noted that the buyback demonstrates their commitment to delivering value to shareholders while retaining financial flexibility. The current market cap is $6.04 billion.

Equifax (NYSE: EFX) announced a $250 million share buyback approval. It is yet another in a series of buybacks valued at about $1.08 billion since 2004. The current market cap is $4.53 billion.

Varian (NYSE: VARI) Board approved a $100 million share repurchase program. The buybacks could boost an already healthy stock. The current market cap is $6.53 billion.

Rachel Lopez
February 15, 2008