Varian Medical closes $600m Varex Imaging spinout

Varian Medical (NYSE:VAR) today announced it successfully completed the $600 million spin-out of its imaging components biz, Varex Imaging (NSDQ:VREX).

Salt Lake City, Utah-based Varex Medical said that common stock in the company will begin trading in the “regular way” today on the Nasdaq Global Select Market under the symbol “VREX.”

“We are very pleased that we were able to complete this successful separation and create two strong independent companies. Varian is now focused exclusively on expanding its position as the leader in systems and software for the treatment of cancer. As a cancer-fighting company we are increasing our efforts to make the treatment of cancer more effective, affordable and accessible for patients around the world.” Varian Medical CEO Dow Wilson said in a prepared release.

Varex makes X-ray tubes, flat-panel detectors, connectors and accessories for imaging, as well as supplying workstations and software for computer-aided diagnostics and image processing. Varex imaging will pursue its own growth strategies independent from Varian, through offering of components, software and services for expanded imaging applications and markets, according to the company.

As part of the separation, Varex made a $200 million cash payment to Palo Alto, Calif.-based Varian, funded from its $300 million revolving credit facility.

The transaction was completed through a distribution of Varex stock to Varian shareholders on January 20, with each Varian holder receiving 0.4 shares of Varex for every 1 share of Varian. No fractional Varex shares were offered in the distribution. Varex has approximately 38 million shares outstanding.

“The past few months have been very busy as we prepared for the spin-off of Varex Imaging and also announced the planned acquisition of the Medical Imaging business of PerkinElmer. Much of our time recently has been filled with meetings, calls and roadshow presentations with the investor and analyst community.  Overall, the past year has been an exciting time for us and I want to thank all the people at Varian and Varex who devoted so much time and effort to make the separation a success,” Varex Imaging prez & CEO Sunny Sanyal said in prepared remarks.

Varian 1st announced its plans to spin-off the business in May 2016, saying in June that it planned to re-named the spin-off as Varex Imaging to reflect “the 65-plus years of technology leadership and strong industry brand recognition of Varian and the excellence in X-ray imaging technology.”

Varex Imaging shares are trading at $27.14 today.

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