VAREX IMAGING CORPORATION (NASDAQ:VREX) Files An 8-K Entry into a Material Definitive Agreement

VAREX IMAGING CORPORATION (NASDAQ:VREX) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01

Entry into a Material Definitive Agreement
The disclosure under Item 2.03 is incorporated by reference in
this Item 1.01.
Item 2.01
Completion of Acquisition or Disposition of Assets
On May 1, 2017 (the Closing Date), Varex Imaging Corporation
(Varex) completed its previously-announced acquisition of the
PerkinElmer Inc. (PKI) Medical Imaging business, which consists
of PerkinElmer Medical Holdings, Inc. and Dexela Limited,
together with certain assets of PKI and its direct and indirect
subsidiaries relating to digital flat panel X-ray detectors that
serve as components for industrial, medical, dental and
veterinary X-ray imaging systems (the Business). The acquisition
of the Business is to the terms of that certain Master Purchase
and Sale Agreement, dated December 21, 2016 (the Purchase
Agreement), by and between PKI and Varian Medical Systems, Inc.
(Varian) and the subsequent Assignment and Assumption Agreement,
dated January 27, 2017, by and between Varian and Varex, to which
Varian assigned and conveyed all of its rights, obligations,
title and interest in the Purchase Agreement to Varex.
On the Closing Date and to the Purchase Agreement, Varex paid PKI
and its subsidiaries approximately $276 million in cash to
acquire the Business, which has about 280 employees, is
headquartered in Santa Clara, California and has additional
operations in Germany, the Netherlands and the United Kingdom.
Varex funded the acquisition and certain costs associated with
the financing through loan borrowings under a new credit
facility, as further described in Item 2.03.
Item 2.03
Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
On the Closing Date, in connection with the acquisition of PKI,
Varex entered into a secured revolving credit facility in an
aggregate principal amount of up to $200 million (the Revolving
Credit Facility) with a five-year term and a secured term loan
credit facility in an aggregate principal amount of $400 million
(the Term Facility, and together with the Revolving Credit
Facility, the Credit Facilities), which will be repaid over five
years, with 5% payable in quarterly installments during each of
the first two years of the term thereof, 7.5% payable in
quarterly installments during the third and fourth years of the
term thereof, and 10% payable in quarterly installments in the
fifth year of the term thereof, with the remaining amount due at
maturity. Varex used the net proceeds from the Term Facility, and
the net proceeds from approximately $97 million drawn on the
Revolving Credit Facility, to pay the approximately $276 million
purchase price for the acquisition of PKI, plus related credit
facility fees, and to repay all of Varexs obligations under its
credit agreement dated as of January 25, 2017 (the Previous
Credit Agreement).
The credit agreement relating to the Credit Facilities (the
Credit Agreement) contains various customary restrictive
covenants that limit, among other things, the incurrence of
indebtedness by Varex and its subsidiaries, the grant or
incurrence of liens by Varex and its subsidiaries, the entry into
sale and leaseback transactions by Varex and its subsidiaries,
and the entry into certain fundamental change transactions by
Varex and its subsidiaries. It also contains customary events of
default and certain financial covenants, including the
requirement to maintain certain financial ratios. The Credit
Agreement is secured by the stock and assets of Varexs material
subsidiaries. The Credit Agreement has several borrowing and
interest rate options including the following indices: (a) LIBOR
rate; or, (b) the base rate (equal to the greater of the prime
rate, the federal funds rate plus 0.50%, or the LIBOR rate for a
one-month period plus 1.00%). Loans under the Credit Agreement
bear interest at a rate per annum using the applicable indices
plus a varying interest rate margin of between 1.75% – 2.75% (for
LIBOR rate loans) and 0.75% – 1.75% (for base rate loans). The
Credit Agreement also provides for fees applicable to amounts
available to be drawn under outstanding letters of credit of
0.125% and a fee on unused commitments that ranges from 0.25% to
0.40%.
Item 5.02
Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
In connection with the closing of the acquisition of the
Business, effective May 2, 2017: (a) Richard E. Colbeth, Varexs
former Senior Vice President and General Manager, X-ray
Detectors, assumed the role of Varexs Senior Vice President of
Engineering, X-ray Detectors; and (b) Dr. Brian Giambattista, the
former President of PKIs Medical Imaging business, was appointed
as Varexs Senior Vice President and General Manager, X-ray
Detectors.
Item 8.01
Other Events.
On May 1, 2017, Varex issued a press release entitled Varex
Imaging Completes Acquisition of PerkinElmer’s Medical Imaging
Business. A copy of the press release is attached as Exhibit 99.1
and incorporated by reference into this item.
Item 9.01
Financial Statements and Exhibits
(a) Financial statements of business acquired
The financial statements required by Item 9.01(a) of Form 8-K
will be filed by amendment within 71 calendar days after the date
this report on Form 8-K must be filed.
(b) Pro Forma Financial Information
The pro forma financial information required by Item 9.01(b) of
Form 8-K will be filed by amendment within 71 calendar days after
the date this report on Form 8-K must be filed.
(d) Exhibits
99.1 Press Release dated May 1, 2017, entitled Varex Imaging
Completes Acquisition of PerkinElmer’s Medical Imaging Business.


About VAREX IMAGING CORPORATION (NASDAQ:VREX)

Varex Imaging Corporation is a supplier of medical X-ray tubes and image processing solutions. The Company’s segments include Medical and Industrial. The X-ray imaging system manufacturers use the Company’s components for medical imaging, cargo screening and border security, to detect, diagnose and protect. The Medical business segment designs, manufactures, sells and services X-ray imaging components for use in a range of applications, including radiographic or fluoroscopic imaging, mammography, special procedures, computed tomography, radiation therapy and computer-aided detection. The Industrial business segment designs, manufactures, sells and services products for use in security and industrial inspection applications, such as cargo screening at ports and borders and non-destructive examination in a range of applications.

VAREX IMAGING CORPORATION (NASDAQ:VREX) Recent Trading Information

VAREX IMAGING CORPORATION (NASDAQ:VREX) closed its last trading session up +0.49 at 34.05 with 150,030 shares trading hands.

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