Varex Imaging (NSDQ:VREX) said yesterday it inked a deal to acquire linear array digital detector maker Direct Conversion for $84.6 million (EU €75 million).

In the deal, Salt Lake City, Utah-based Varex said that it agreed to acquire at least 90% of the outstanding shares of Stockholm-based Direct Conversion, and that the $84.6 million price tag was for 100% of the company’s outstanding shares.

Varex said that $11.3 million (EU €10 million) of the total offered in the deal will be paid in either Varex common stock or cash on the first anniversary of the closing. The company said it plans to fund the acquisition using available cash and debt under its existing credit facility.

“We are excited to be joining Varex at this point in the growth and expansion of our digital detector array products. This transaction is expected to accelerate the adoption of this technology in the marketplace utilizing Varex’s position as one of the leading providers of digital detectors and its global distribution channels,” Direct Conversion CEO Spencer Gunn said in a press release.

Last year, Direct Conversion reported sales of approximately $18.1 million (EU €16 million) and projected double-digit annual growth rates over the next five years. The company reportedly has more than $45.11 million (EU €40 million) in signed multi-year supply agreements.

Varex said that it expects the deal to close by the end of the third quarter, and to be accretive to its adjusted EPS in its fiscal year 2020 and to generate a return on invested capital greater than its capital cost within three years.

“Upon closing, this acquisition will expand our product portfolio to include new linear array digital detectors along with a revenue stream from these products for certain medical, dental and industrial applications. It is expected that the current applications will widen our addressable market for digital detector products by approximately $200 million over the coming years, with additional addressable market expansion potential of up to $500 million by replacing current CT detectors with photon counting technology in the future,” Varex CEO Sunny Sanyal said in a press release.

Last month, Varex saw shares rise after it beat expectations on Wall Street with its fiscal year 2019 first quarter earnings.

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