Agilent has already identified a path to splitting its IT systems and real estate as part of the plan. "We have a lot of regulatory and approval processes to go through in many countries, and that's the gating item to the final completion of the deal," said Sullivan.
Ron Nersesian, who has been Agilent's president and chief operating officer, is the CEO-designate of the new standalone test company. Previously Nersesian ran Agilent's T&M business and helped it develop more modular gear to compete with the likes of National Instruments, said Jessy Cavazos, test and measurement analyst at Frost & Sullivan.
On the conference call, Nersesian said his goals are to focus on a successful spin out and organic growth, leaving acquisitions on the back burner. Over the next several months he expects to name a new board, starting with a non-executive director, and help find a new name and brand for the company.
Both companies will use the same compensation methods. However, the higher growth targets of the life sciences business compared to the mature T&M unit may result in differences going forward. One Wall Street analyst on the call worried aloud about competitors hiring away key employees from the new T&M group.
Cavazos of Frost & Sullivan said the spin out would be good for the T&M group. It is still arguably the largest T&M company with the possible exception of Danaher whose independent Tektronix and Fluke units are usually counted separately.
The new T&M company can "leverage more R&D dollars for its own business [rather than funding the medical unit's growth], and they need to be more competitive," she said.
In February, Agilent lost to a competitor a big deal to sell test gear to a wireless OEM in North America. Test gear for wireless is a hot growth area.
Rohde & Schwarz, a private German firm has strength in wireless and has grown to nearly the size of Agilent's T&M unit. Smaller competitors such as Japan's Anritsu and Teledyne-LeCroy are also showing strength in wireless, she added.
According to reports, Agilent shares were up 6.5 percent to $52.52 in early trading Thursday. As of Wednesday's close, the stock was up 20 percent so far this year.