Varian Medical’s components spinout, Varex Imaging, begins public trading

Shares in Varex Imaging (NSDQ:VREXV), the $200 million components business spun out of Varian Medical (NYSE:VAR), hit the market last week for their 1st day of public trading.

Stock in Salt Lake City-based Varex debuted Jan. 20 at $28 apiece, hitting a high of $28.50 before closing up 0.5% at $28.15 per share. Varian said earlier this month that it expects the spinout, accomplished via a tax-free distribution of shares such that each stockholder receives 0.4 shares of Varex for each Varian share, to be complete Jan. 28. The stock is slated to begin normal trading under the “VREX” symbol Jan. 30.

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.

“We believe that an independent equity structure that will afford us direct access to capital markets will enable us to capitalize on unique growth opportunities in the imaging components space. We also plan to create incentive compensation arrangements for employees that are more directly tied to our performance, which we believe will enhance our ability to attract and retain key talent globally, and further align management and employee incentives with our performance and growth objectives,” Varex president & CEO Sunny Sanyal wrote in a letter to investors filed with the SEC. “In addition, as a stand-alone company, we expect to be able to give you more visibility into the opportunities in the imaging components space and enhance your ability to understand and value the merits, performance and future prospects of our business.”

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.

VREXV shares were holding steady at $28.15 apiece today soon after the markets opened; VAR shares were up 0.03% to $89.97 each.

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