Varian Medical Systems has announced an agreement to acquire the Medical Imaging business of PerkinElmer Inc. as an addition to the Varian Imaging Components business, which is slated to become an independent public company, Varex Imaging Corp., 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 (pictured above), 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.”Back To Top
Varian to acquire PerkinElmer's medical imaging business. Appl Rad Oncol.