July 29, 2014
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO
(the “Jurisdiction”)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
AGILENT TECHNOLOGIES, INC.
(the “Filer”)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the “Legislation”) for an exemption (the “Exemption Sought”) from the prospectus requirements contained in the Legislation in connection with the distribution (the “Spin-Off”) by the Filer of the shares of common stock of Keysight Technologies, Inc. (“Keysight”), a direct wholly-owned subsidiary of the Filer, by way of dividend in specie to holders (“Filer Shareholders”) of shares of common stock of the Filer (“Filer Shares”) resident in Canada (“Filer Canadian Shareholders”).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filer has provided notice that Section 4.7(1) of Multilateral Instrument 11-102 - Passport System (“MI 11-102”) is intended to be relied upon in each of the other provinces and territories of Canada.
Interpretation
Terms defined in National Instrument 14-101 - Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
Representations
This decision is based on the following facts represented by the Filer.
1The Filer is a corporation incorporated in Delaware with principal executive offices in Santa Clara, California, U.S.A.. The Filer is a measurement company providing core bio-analytical and electronic measurement solutions to the life sciences, diagnostics and genomics, chemical analysis, communications and electronics industries.
2The Filer is not a reporting issuer under the securities laws of any province or territory of Canada and, currently, has no intention of becoming a reporting issuer under the securities laws of any province or territory of Canada.
3The authorized capital of the Filer consists of 2 billion Filer Shares and 125 million shares of preferred stock. As at April 30, 2014, 333,260,909.8 Filer Shares were issued and outstanding and no shares of preferred stock were issued and outstanding.
4Filer Shares are listed on the New York Stock Exchange (the “NYSE”) and trade under the symbol “A”. Filer Shares are not listed on any Canadian stock exchange and, currently, the Filer has no intention of listing its shares on any Canadian stock exchange.
5The Filer is subject to the 1934 Act and the rules, regulations and orders promulgated thereunder.
6Based on a “Geographic Breakdown Snapshot” of registered holders provided by Computershare Investor Services (the Filer’s transfer agent) obtained by the Filer, as of June 5, 2014, there were 228 registered Filer Canadian Shareholders holding approximately 24,428 Filer Shares, representing approximately 9.43% of the registered shareholders of the Filer worldwide and holdings of approximately 0.0073% of the outstanding Filer Shares as of such date. The Filer does not expect these numbers to have materially changed since that date.
7Based on a “Geographic Survey” of beneficial holders provided by Georgeson, Inc. obtained by the Filer, as of January 21, 2014, there were 68 beneficial Filer Canadian Shareholders holding approximately 3,177,568 Filer Shares, representing approximately 0.55% of the beneficial holders of Filer Shares worldwide and holdings of approximately 0.95% of the outstanding Filer Shares as of April 30, 2014. The Filer does not expect these numbers to have materially changed since those dates.
8Based on the information above, the number of registered and beneficial Filer Canadian Shareholders and the proportion of Filer Shares held by such shareholders is de minimis.
9The Filer is proposing to spin off its electronic measurement products business into a newly formed independent company, Keysight, through a series of transactions. These transactions are expected to result in the Spin-Off by the Filer, pro rata to its shareholders of all of the shares in the common stock of Keysight (the “Keysight Shares”), which will be 100% of the Keysight Shares outstanding immediately prior to such distribution.
10Keysight is a Delaware corporation with principal executive offices in Santa Rosa, California. It is currently a wholly-owned subsidiary of the Filer that, at the time of the Spin-Off, will hold the Filer’s electronic measurement business.
11As of the date hereof, all of the issued and outstanding Keysight Shares are held by the Filer, and no other stock of Keysight are issued and outstanding.
12Fractional shares of Keysight Shares will not be distributed in connection with the Spin-Off. A distribution agent will aggregate the amount of fractional shares that would otherwise have been distributed into whole shares of Keysight and will sell such shares into the public market at then prevailing market prices and distribute the cash proceeds in U.S. Dollars (net of any applicable transfer taxes and the costs and expenses of such sale and distribution). The distribution agent will distribute such net proceeds pro rata to each Filer Shareholder who would otherwise have been entitled to receive a fractional share of Keysight.
13Filer Shareholders will not be required to pay for the Keysight Shares, or to surrender or exchange Filer Shares or take any other action to be entitled to receive their Keysight Shares. The Spin-Off will occur automatically and without any investment decision on the part of Filer Shareholders.
14Following the Spin-Off, Keysight will cease to be a subsidiary of the Filer.
15Keysight will apply to have the Keysight Shares listed on the NYSE before the Spin-off.
16After the completion of the Spin-off, the Filer will continue to be listed and traded on the NYSE.
17Keysight is not a reporting issuer in any province or territory in Canada nor are its securities listed on any stock exchange in Canada. To the knowledge of the Filer, Keysight has no intention to become a reporting issuer in any province or territory in Canada or to list its securities on any stock exchange in Canada after the completion of the Spin-Off.
18The Spin-Off will be effected under the laws of the State of Delaware.
19Because the Spin-Off will be effected by way of a dividend of Keysight Shares to Filer Shareholders, no shareholder approval of the proposed transaction is required (or being sought) under Delaware law.
20In connection with the Spin-Off, Keysight filed with the SEC a registration statement on Form 10 under the 1933 Act on March 5, 2014, detailing the proposed Spin-Off and subsequently filed amendments to the registration statement on April 18, 2014 and May 23, 2014 (as subsequently amended, restated and supplemented, the “Registration Statement”).
21After the SEC has completed its review of the Registration Statement, Filer Shareholders will receive a copy of an information statement (the “Information Statement”) forming part of the Registration Statement. All materials relating to the Spin-Off sent by or on behalf of the Filer and Keysight in the United States (including the Information Statement) will be sent concurrently to Filer Canadian Shareholders.
22The Information Statement will contain prospectus level disclosure about Keysight.
23Filer Canadian Shareholders who receive Keysight Shares as a dividend pursuant to the Spin-Off will have the benefit of the same rights and remedies in respect of the disclosure documentation received in connection with the Spin-Off that are available to Filer Shareholders resident in the United States.
24Following the completion of the Spin-Off, Keysight will send concurrently to Keysight Shareholders resident in Canada the same disclosure materials required to be sent under applicable U.S. laws to Keysight Shareholders resident in the United States.
25There will be no active trading market for the Keysight Shares in Canada following the Spin-Off and none is expected to develop. Consequently, it is expected that any resale of Keysight Shares distributed in connection with the Spin-Off will occur through the facilities of the NYSE.
26The Spin-Off to Filer Canadian Shareholders would be exempt from the Prospectus Requirements pursuant to subsection 2.31(2) of NI 45-106 but for the fact that Keysight is not a reporting issuer under the securities legislation of any jurisdiction in Canada.
27Neither the Filer nor Keysight is in default of any securities legislation in any jurisdiction of Canada.
Decision
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that the first trade in the Keysight Shares acquired pursuant to the Spin-Off will be deemed to be a distribution unless the conditions in Section 2.6 or subsection 2.14(1) of National Instrument 45-102 - Resale of Securities are satisfied.
“James D. Carnwath” “Sarah B. Kavanagh”
Commissioner Commissioner
Ontario Securities Commission Ontario Securities Commission