The acquired business develops, manufactures and sells digital detectors that are key components in medical and industrial X-ray imaging systems made by global OEM manufacturers. It is headquartered in Santa Clara, Calif., and has operations in Germany, the Netherlands, and the United Kingdom, which combined have approximately 280 employees. This acquisition is expected to add approximately $140 million in annual sales and Varex believes it will be transformative to the company's digital detector operations, enabling the company to increase innovation, leverage its manufacturing scale and expand its cost leadership position.
"We are very excited about the opportunities and prospects of adding this imaging expertise into the Varex organization. I want to welcome our new employees to Varex and I look forward to having the combined team focused on integrating our operations to achieve our goal of producing the broadest, most cost-effective portfolio of components for the imaging industry," said Sunny Sanyal, CEO of Varex Imaging Corporation.
The leader of Varex's combined imaging detector business will be Dr. Brian Giambattista, Varex's newly appointed senior vice president and general manager of X-ray Detectors. Giambattista provides strong leadership and continuity for this business, as he served as president of PerkinElmer's Medical Imaging business since 2008. He has nearly 30 years of experience in the industry, having held various management and engineering roles at PerkinElmer and General Electric, and received his doctorate degree in physics from the University of Virginia. Rick Colbeth, who held this Varex role prior to completion of the acquisition, will become Varex's senior vice president of engineering of X-ray Detectors.
"This imaging business is highly complementary to Varex's imaging detector business and has a similar financial profile. Customer overlap is minimal and we see revenue and cost synergy opportunities that we expect to achieve over time," Sanyal added. "Some of these opportunities include: adding new digital detector technology to the Varex product portfolio; significant new cross-selling opportunities for X-ray imaging solutions; leveraging combined volumes to gain manufacturing productivity; and further expansion in the Industrial imaging market."
In connection with closing this transaction, Varex replaced its prior credit facility with a larger $600 million credit facility consisting of a $400 million five-year term loan and a $200 million revolving line of credit. Varex used $207 million to repay existing debt and $286 million for the acquisition and related credit facility fees.
Varex Imaging Corporation designs, develops, and manufactures X-ray imaging components, including tubes, digital flat panel detectors and other image processing solutions, which are key components of X-ray imaging systems. With a more than 65-year history of innovation, Varex's components are used in medical imaging as well as in industrial and security imaging applications. Global OEM manufacturers of X-ray imaging systems use the company's X-ray sources, digital detectors, connecting devices and imaging software as components in their systems to detect, diagnose and protect. Varex employs approximately 1,800 people, including the employees from PerkinElmer, located at manufacturing and service center sites in North America, Europe, and Asia.