PALO ALTO, Calif., Dec. 7, 2016 /PRNewswire/ -- Varian Medical Systems (NYSE:VAR) today announced an update to its previously announced plans to separate its Imaging Components business. The separation is intended to be executed via a tax-free distribution to Varian stockholders of common stock in Varex Imaging Corporation, a new stand-alone public company that will hold the Imaging Components business. As part of the separation, which is now expected to be executed by the end of January 2017, Varian will receive an approximate $200 million cash transfer from Varex Imaging immediately prior to the stock distribution. Varex Imaging will borrow approximately $200 million to fund this cash transfer.
"The Imaging Components business has gained momentum since last May when we announced the planned separation and we now believe that Varex can support this modest change in its planned capital structure," said Dow Wilson, CEO of Varian Medical Systems. "The cash transfer from Varex Imaging provides Varian with the means to reduce debt and conduct further share repurchases. It also positions us to execute our long-term strategy, including supporting future strategic acquisitions."
The separation is intended to enable Varian to focus on expanding its position as a global cancer company with leading technology and services and empower Varex Imaging to expand its product portfolio and grow as a global leader in components, software and services for medical and industrial imaging applications. The separation is expected to allow each of Varian and Varex Imaging to concentrate solely on their respective operations, providing greater flexibility to invest capital in their respective businesses and to provide a sharper focus on the unique needs of customers in each industry.
Varex Imaging
Varex Imaging will be a high-volume manufacturer of X-ray tubes, flat panel detectors and high-voltage connectors as well as a supplier of imaging software and specialized accelerators for high-energy x-ray imaging. It is expected to have annual revenues in excess of $600 million and approximately 1,400 employees around the world. Varex management will include Sunny Sanyal, current president of Varian's Imaging Components business, as the Chief Executive Officer, and Clarence Verhoef, current Varian Corporate Controller, as Chief Financial Officer. Additional information on this business is available at www.varian.com/investor.
