Blog Coverage Varian Medical Systems to Acquire PerkinElmer’s Medical Imaging Business

LONDON, UK / ACCESSWIRE / December 23, 2016 / Active Wall St. blog coverage looks at the headline from Varian Medical Systems, Inc. (NYSE: VAR) as the Company announced on December 22, 2016, an agreement to acquire the Medical Imaging business, a supplier of digital flat panel X-ray detectors that serve as components for industrial, medical, dental and veterinary X-ray imaging systems from PerkinElmer, Inc. (NYSE: PKI). Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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The Upcoming Separation

Varian stated that it has acquired PerkinElmer’s Medical Imaging business 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 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. The new imaging components company is expected to have annual revenues of about $575 million and has approximately 1,300 employees around the world. Varex is expected to transfer approximately $200 million in cash to Varian as part of the separation.

The Deal

Varex will pay $276 million to acquire PerkinElmer’s Medical Imaging business. Varex plans to finance the acquisition through an expansion of its bank credit facilities. PerkinElmer’s Medical Imaging business has about 280 employees and it is headquartered in Santa Clara, California with operations in Germany, the Netherlands, and the UK. The acquisition is expected to close after the planned separation of Varex from Varian. 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,” Mr. Sanyal added.

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.”

Stock Performance

At the closing bell, on Thursday, December 22, 2016, Varian Medical’s share price finished yesterday’s trading session at $90.27, dropping 0.21%. A total volume of 415.28 thousand shares exchanged hands. The stock has advanced 12.68% and 11.73% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the company have surged 11.72%. The stock is trading at a PE ratio of 21.50.

PerkinElmer’s stock fell 1.41%, ending the trading session at $52.34. A total volume of 970.14 thousand shares were traded at the end of the day, which was higher than the 3-month average volume of 693.54 thousand shares. In the last month and previous six months, shares of the company have advanced 3.32% and 1.17%, respectively. The stock is trading at a PE ratio of 24.71 and has a dividend yield of 0.53%.

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