Dive Brief:
- Teledyne Technologies said Monday it has agreed to buy Varex Imaging for about $1.1 billion.
- Varex designs, manufactures and sells X-ray imaging components and other products for use in medical and industrial applications.
- Teledyne provides digital imaging technologies for industrial, government and medical use but has minimal overlap between its portfolio and Varex’s products.
Dive Insight:
Teledyne entered the healthcare market in 2011 through the acquisition of DALSA, which sold imaging technologies for industrial and medical use, as well as for aerial and satellite imaging. In 2017, Teledyne acquired e2v technologies, a supplier of magnetrons to manufacturers of cancer radiotherapy devices. Medical applications are part of a digital imaging unit that generated 52% of Teledyne’s sales last year.
Buying Varex will further increase Teledyne’s exposure to the healthcare market. Over the first nine months of its fiscal year, Varex reported net medical revenues of $435 million, down 1% on the prior year period. The company’s industrial unit is smaller, with sales of $201.1 million in the period, but faster growing.
Varex’s medical business markets X-ray tubes, flat panel and photon counting detectors, and connect and control accessories for use in diagnostic imaging. Teledyne sells related technology to similar customers, Executive Chairman Robert Mehrabian said in a statement.
Yet the companies’ products “are uniquely complementary with minimal overlap,” Mehrabian said. The executive said that while Teledyne produces X-ray detectors, it lacks Varex’s ability to provide detectors for high-radiation environments such as oncology. Similarly, only Varex provides new advanced photon counting detectors for healthcare and industrial inspection.
“Our X-ray technologies fit naturally alongside Teledyne's product portfolio, and its resources will help us accelerate adoption of our advanced imaging solutions and development of the next generation of products,” Varex CEO Sunny Sanyal said in a statement.
Teledyne will need regulatory approvals to close the deal. The company expects to complete the buyout early next year.
Medtech M&A activity has remained high, with multiple deals worth more than $1 billion being announced or closed this year.
