The spin off will be a new, stand-alone public company separated through a tax-free distribution to Varian stockholders, the company said. Varex Imaging will borrow approximately $200 million to fund the transfer, Palo Alto, Calif.-based Varian Medical said.
“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. 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,” CEO Dow Wilson said in prepared remarks.
Varian said the name was chosen to reflect “the 65-plus years of technology leadership and strong industry brand recognition of Varian and the excellence in X-ray imaging technology,” according to a press release.
The spun-off company will manufacture 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.