SALT LAKE CITY, March 21, 2019 /PRNewswire/ -- Varex
Imaging Corporation (Nasdaq: VREX) announced today it has entered
into an agreement to acquire at least 90% of the outstanding shares
of common stock of Direct Conversion AB (publ). Stockholm-based Direct Conversion, also known
by its Ajat and XCounter brands, is a leading manufacturer and
marketer of linear array digital detectors utilizing direct
conversion and photon counting technology.
The aggregate purchase price is €75 million for 100% of the
outstanding shares, subject to customary adjustments, of which €10
million will be paid in either Varex common stock or cash on the
first anniversary of closing. The company plans to fund the
consideration using available cash and debt under its existing
credit facility. The transaction is expected to be completed in the
third quarter of the current fiscal year.
In 2018, Direct Conversion had revenues of €16 million with
projected double-digit annual growth rates over the next five
years. Direct Conversion also has more than €40 million in signed
multi-year supply agreements with customers, primarily for its
photon counting detector products. Varex expects the acquisition to
be accretive to adjusted EPS in fiscal year 2020 and to generate a
return on invested capital greater than its cost of capital 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," said Sunny Sanyal, Chief Executive Officer of Varex
Imaging Corporation.
The X-ray imaging industry has been working on photon counting
technologies because detectors built with this technology can
significantly improve image quality while using lower dose and
performing more precise material discrimination. Direct Conversion
has successfully commercialized linear array digital detectors for
certain medical and industrial applications and is expected to
continue to work on applying this technology to additional
applications, including medical CT detectors.
Spencer Gunn, Chief Executive
Officer of Direct Conversion AB said, "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."
About Direct Conversion
Under its Ajat and XCounter brands, Direct Conversion provides
innovative linear array digital detector products that are
incorporated into imaging systems used globally by a broad range of
medical and industrial customers: systems used by orthodontists,
orthopedic radiographers, oil & gas engineers, food packagers
and nuclear site inspectors. Direct Conversion is one of the
world's largest manufacturer of CdTe detectors. For more
information about Direct Conversion visit directconversion.com.
About Varex
Varex Imaging Corporation is a leading innovator, designer and
manufacturer of X-ray imaging components, which include X-ray
tubes, digital detectors and other image processing solutions that
are key components of X-ray imaging systems. With a 65+ year
history of successful innovation, Varex's products are used in
medical imaging as well as in industrial and security imaging
applications. Global OEM manufacturers incorporate the company's
X-ray sources, digital detectors, connecting devices and imaging
software in their systems to detect, diagnose and protect.
Headquartered in Salt Lake City,
Utah, Varex employs approximately 2,000 people located at
manufacturing and service center sites in North America, Europe, and Asia. For more information
about Varex, visit vareximaging.com.
Forward Looking Statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Statements concerning
industry or market outlook; backlog; addressable market; customer
demand and acceptance of products or technology; revenues, product
volumes, synergies; future growth rates, or other expected future
financial results or performance; and any statements using the
terms "believe," "expect," "intend," "outlook," "future,"
"anticipate," "will," "could," "estimate," "guidance," or similar
statements are forward-looking statements that involve risks and
uncertainties that could cause the company's actual results to
differ materially from those anticipated. While forward-looking
statements are based on assumptions and analyses made by us that we
believe to be reasonable under the circumstances, whether actual
results and developments will meet our expectations and predictions
depend on a number of risks and uncertainties which could cause our
actual results, performance, and financial condition to differ
materially from our expectations. Such risks and uncertainties
include our inability to close the acquisition; our inability to
properly integrate Direct Conversion; the continued impact of
tariffs or a global trade war on the company's products and
customer purchasing patterns; our ability to obtain the intended
benefits and synergies of acquisitions; global economic conditions;
demand for and delays in delivery of products of the company or its
customers; the company's ability to develop, commercialize and
deploy new products; the impact of reduced or limited demand by
purchasers of certain X-ray products; the impact of competitive
products and pricing; the company's ability to maintain or increase
margins; the ability to remediate material weaknesses in internal
control; and the other risks listed from time to time in the
company's filings with the U.S. Securities and Exchange Commission,
which by this reference are incorporated herein. Any
forward-looking statements made by us in this news release speaks
only as of the date on which it is made. Factors or events that
could cause our actual results to differ may emerge from time to
time, and it is not possible for us to predict all of them. The
company assumes no obligation to update or revise the
forward-looking statements in this release because of new
information, future events, or otherwise.
For Information Contact:
Howard Goldman
Director of Investor & Public Relations
Varex Imaging Corporation
801.978.5274 | howard.goldman@vareximaging.com
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SOURCE Varex Imaging Corporation