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Varian Medical Systems is spinning off its imaging components business, creating a stand-alone, Salt Lake City-based company with $575 million in annual revenues and 1,300 employees globally.
The split, done through a tax-free distribution to Varian stockholders, will result in two strong companies focusing on distinctly different missions, said Dow Wilson, CEO of Varian Medical Systems, which is based in Palo Alto, Calif.
"Making these businesses independent will give each of them more freedom to invest in and pursue new growth strategies in their unique core markets," Wilson said. "This should sharpen the focus of each business and align their employee incentives and performance more closely with serving the specific needs of their respective markets."
Varian Imaging Components manufactures X-ray tubes, flat panel detectors, various imaging accessories and work stations and software for computer-aided diagnostics and image processing.
Wilson predicted the company will become a leading suppliers of components, software and engineering services for imaging equipment used in medical diagnostics, dentistry, veterinary care, security and industrial inspections.
Sunny Sanyal will be CEO of the new company. Clarence Verhoef will be its chief financial officer.
Without the imaging business, Varian Medical Systems will concentrate on providing systems for treating and managing cancer, Wilson said. It will still have $2.5 billion in annual revenues and more than 6,000 employees around the world.
"We have been a cancer-fighting company for a long time and this opens the door to expanding our portfolio with additional technologies and tools for making treatment of cancer more effective, affordable and accessible for patients," he added.
The company provides hospitals, clinics and healthcare systems with equipment and services of radiotherapy, radiosurgery, brachytherapy and proton therapy.
The spin-off, which is expected to cost $35 million, likely will be completed by year's end. JP Morgan and Wachtel, Lipton, Rosen & Katz advised Varian on the details.