Agilent Buys Varian for $1.5B
SANTA CLARA, Calif., July 27, 2009 – Agilent Technologies has agreed to buy medical device maker Varian Inc. of Palo Alto, Calif., for $1.5 billion in cash.
Varian had annual revenue of $1 billion in its fiscal year 2008 with a product portfolio that includes lab instrumentation and consumables. According to its Web site, it has 4800 employees.
Agilent will pay $52 cash per share for Varian, a premium of approximately 35 percent over its closing price on July 24, 2009. The boards of both companies have unanimously approved the all-cash offer.
Agilent said the acquisition broadens its applications and offerings in life sciences, environmental, and energy and materials. It also expands the company's product portfolio into atomic and molecular spectroscopy and other areas and establishes a leading position in nuclear magnetic resonance, imaging and vacuum technologies.
Santa Clara-based Agilent has been hard hit by the economic downturn, particularly in its electronic measurement (EM) business and Semiconductor & Board Test segment. The company has cut 20 percent of its work force in three rounds of job cuts since December (See Agilent Restructuring EM). Its Bio-Analytical Measurement segment has fared the best under the recession.
“This acquisition is a major step in Agilent’s transformation into a leading bioanalytical measurement company,” said Bill Sullivan, Agilent’s president and CEO. “While we continue to be a world leader in electronic measurement, our biggest opportunities for future growth are in bioanalytical measurement. ”
Varian Chairman and CEO Garry Rogerson said the combination offers Agilent a different but complementary set of markets and applications. “For instance, while Agilent is a leader in food safety, Varian is well established in the energy industry and has a broad spectrum of products for environmental analysis. Together, the combined company will be able to provide customers with the most comprehensive set of solutions across a wider range of industries.”
The companies did not say how many jobs might be affected by cost synergies that could save them $75 million annually. Agilent has targeted a 20 percent ROI capital within four to five years.
Once the acquisition has been completed, Agilent Executive VP and CFO Adrian Dillon will be responsible for combining Varian with Agilent’s bioanalytical segment.
The transaction is subject to approval by Varian shareholders, as well as customary closing conditions and regulatory approvals, which Agilent expects to meet before the end of the year. It is not subject to any financing conditions.
For more information, visit: http://www.agilent.com/
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