PALO ALTO, Calif., Dec. 22, 2016 /PRNewswire/ -- Varian Medical
Systems (NYSE:VAR) today announced an agreement to acquire the
Medical Imaging business of PerkinElmer, Inc. (NYSE:PKI) as an
addition to the Varian Imaging Components business, which is slated
to become an independent public company, Varex Imaging Corporation,
through a previously announced separation expected to be completed
in January 2017.
The acquisition is expected to close after the planned
separation of Varex from Varian and following receipt of required
regulatory approvals. Varex will pay $276
million to acquire PerkinElmer's Medical Imaging business,
which is a supplier of digital flat panel X-ray detectors that
serve as components for industrial, medical, dental and veterinary
X-ray imaging systems. This business, which has about 280
employees, is headquartered in Santa
Clara, Calif. with operations in Germany, the
Netherlands and the United
Kingdom. The acquisition, which is contingent on the
satisfaction of customary closing conditions, including obtaining
third party and regulatory consents, is expected to be immediately
accretive to Varex following the closing.
"This is a natural fit for our Varex business with complementary
digital imaging products that will serve to accelerate our
profitable growth with more than $140
million in new revenue," said Sunny
Sanyal, the current president of Varian's Imaging Components
business who is expected to become CEO of Varex. "This
acquisition would add new digital imaging technology to our
portfolio that would enable us to offer customers a broader range
of imaging solutions and provide us with additional cross-selling
opportunities. This would also expand our footprint in the
industrial imaging sector. Furthermore, on a combined basis,
this acquisition would give us the ability to strengthen our
manufacturing productivity."
Varex plans to finance the acquisition through an expansion of
its bank credit facilities to approximately $600 million. As announced previously,
Varex is expected to transfer approximately $200 million in cash to Varian as part of the
separation. "Varex is a growth business with strong cash
flows that we are confident will enable us to support a debt level
at approximately three-times fiscal year 2016 proforma EBITDA
including both businesses," said Sanyal.
The Varian Imaging Components business (Varex) is a leading
innovator, designer and manufacturer of X-ray imaging components,
including tubes and digital flat panel detectors and other image
processing solutions for medical and industrial applications.
This global business generated about $600
million in revenues in fiscal year 2016 and has a more than
65-year history of successful innovation, manufacturing and
commercialization in X-ray imaging.
Robert Friel, chairman and chief
executive officer of PerkinElmer, said, "Combining our Medical
Imaging business with Varex's capabilities will better position the
business to support its customers and continue to innovate and
develop new imaging systems. In addition, the divestiture
will allow PerkinElmer to focus our investments and accelerate
growth in higher priority areas."
About Varian Medical Systems, Inc.
Varian Medical
Systems, Inc., of Palo Alto,
California, focuses energy on saving lives by equipping the
world with advanced technology for fighting cancer and for X-ray
imaging. The company is the world's leading manufacturer of
medical devices and software for treating cancer and other medical
conditions with radiation. The company provides comprehensive
solutions for radiotherapy, radiosurgery, proton therapy and
brachytherapy. The company supplies informatics software for
managing comprehensive cancer clinics, radiotherapy centers and
medical oncology practices. Varian is also a premier supplier of
X-ray imaging components, including tubes, digital detectors,
cables and connectors as well as image processing software and
workstations for use in medical and industrial settings, as well as
for security and non-destructive testing. Varian Medical
Systems employs approximately 7,700 people who are located at
manufacturing sites in North
America, Europe, and
China and sales and support
offices around the world. For more information, visit
http://www.varian.com or follow us on Twitter.
Forward-Looking Statements
Except for historical
information, this news release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Statements concerning industry or market outlook,
including customer demand for and acceptance of products or
technology; the ability to complete the acquisition and its impact
on financial results; the ability to obtain regulatory approvals;
growth drivers; future orders, revenues, or earnings growth or
other financial results or performance; and any statements using
the terms "anticipate," "believe," "expect," "slated," "expand,"
"confident," "plan," "will," "would," "could" or similar statements
are forward-looking statements that involve risks and uncertainties
that could cause the company's actual results to differ materially
from those anticipated. Such risks and uncertainties include the
ability to complete the planned spin-off on the anticipated timing,
or at all; the ability to complete the acquisition of
PerkinElmer's Medical Imaging business on the anticipated timing,
or at all; the ability to effectively integrate the products of
PerkinElmer's Medical Imaging business into the company's
product offerings and sales and marketing operations, recognize the
intended benefits of the acquisition, and retain the services of
key acquired personnel; global economic conditions; currency
exchange rates and tax rates; the impact of the Affordable Health
Care for America Act (including excise taxes on medical devices)
and any further healthcare reforms (including changes to Medicare
and Medicaid), and/or changes in second-party reimbursement levels;
demand for and delays in delivery of products of the company,
PerkinElmer's Medical Imaging business or their respective
customers; the company's ability to develop, commercialize and
deploy new products; the company's ability to meet regulatory
requirements, regulations or procedures; changes in the legal or
regulatory environments; the impact of reduced or limited demand by
purchasers of certain X-ray products; and the other risks listed
from time to time in the company's filings with the Securities and
Exchange Commission, which by this reference are incorporated
herein. The company assumes no obligation to update or revise the
forward-looking statements in this release because of new
information, future events, or otherwise.
FOR INFORMATION CONTACT:
Spencer Sias (650) 424-5782
spencer.sias@varian.com
Howard Goldman (801) 978-5274
howard.goldman@varian.com
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SOURCE Varian Medical Systems