Agilent Technologies announced plans Thursday to split itself into two separate companies, with one of the new companies to be based in Santa Rosa.
The electronics measurement division will be spun off into its own stand-alone, publicly traded company.
"Today Agilent announced the biggest and most profound change in our history," Bill Sullivan, Agilent president and CEO, said in a conference call.
The change came 13 years after Agilent was spun off from its original company, Hewlett-Packard, creating what is now Sonoma County's largest high-tech employer.
"It's a historic moment for the company, frankly," said Guy S?? president of the Electronic Measurements Group, who will stay on to lead the R&D, sales and marketing teams.
Agilent's life sciences and diagnostics divisions will retain the company name. The spinoff company, which is being referred to by Agilent as "the EM company," for electronic measurement, has not yet been named, executives said.
In Santa Rosa, more than 95 percent of the approximately 1,175 employees are part of the electronics measurement group, and will move to the new company, S??said. Employees found out about the spinoff Thursday morning, said Jeff Weber, Agilent spokesman.
Executives chose Santa Rosa for the headquarters of the new company because of the Sonoma County unit's deep expertise in technology, research and development, he added.
"The rationale for the separation of the company is very straightforward," Sullivan said. "Agilent is involved in two distinct investment and business opportunities, and as two separate companies we believe we will be able to deliver enhanced shareholder value."
Before the announcement, Agilent faced mounting pressure from shareholders who were unhappy with revenue losses in the electronics measurement division compared with growth in the life science and diagnostic divisions.
"The board is always looking at how to improve shareholder returns for the company," S??said. "There has been now (for) a few years a constant tension, where more and more of our investors are from the life science and health care sectors."
The health care investors didn't understand the electronics business, and they were especially unexcited about the cycles in the business, S??said.
"We gave the shareholders the choice, and in this case, health care investors will be very happy with the new Agilent that is very focused on health care. For us, we will probably be more compared to companies in the IT sector," S??said.
Ron Nersesian, who used to run the Santa Rosa division before he was promoted to president and COO of Agilent in 2011, will become the president and CEO of the new company.
"He knows our business really well, and in the past 18 months has been trained to be doing the CEO job," S??said. "He is ready and has a strong set of management talents."
Nersesian and Sullivan addressed employees in the Santa Rosa office Thursday afternoon, Weber said. S??was in Tokyo to help break the news to employees and customers in Asia.
The maneuver echoes the 1999 decision by Hewlett-Packard that created Agilent. At that time, H-P decided to focus on the computer and printer business, placing its test and measurement, chemical analysis, health care and semiconductor products groups into a new company.
"Agilent's history is one of reinvention, starting with our own separation from H-P and including four major spinoffs since 2005," Sullivan said. "We are once again making a bold move, as we have done many times in the past, to ensure a future of sustainable growth for both the (life science) and EM companies."