Release The VREX: Varian’s Varex Spinoff Set For January 28th

Late last year Varian Medical Systems (VAR) pushed back the timing of its Varex Imaging spinoff to January 2017. Now the company’s board of directors is sticking with that target by officially approving the separation of the imaging business and setting January 28th as the distribution date. Varian shareholders as of January 20th should receive 0.4 shares of Varex for every 1 VAR shares owned. Since no fractional shares will be issued, shareholders will need to own at least 3 Varian shares in order to receive any Varex shares. The new company will trade on the Nasdaq under the ticker ‘VREX’. A when-issued market is expected to exist ‘on or around’ January 20th.

The company certainly took advantage of its extra month. In late December, Varian acquired PerkinElmer’s (PKI) medical imaging business for $276m. The deal will close after the spinoff and the business will be folded into Varex’s portfolio. In order to finance the transaction, Varex expanded its credit facilities to $600m of which $200m will be sent to Varian as a dividend. Ultimately, adding an extra month wasn’t such a big deal.

Disclosure: Author holds no position in any stock mentioned.