Mountain View, CA,
June 6, 2000
Varian Medical Systems, Inc. (NYSE:VAR) today announced an
agreement to acquire IMPAC Medical Systems, Inc., a leader in
information systems for managing radiation and medical oncology
and related areas. The acquisition enables Varian Medical Systems,
the world leader in radiotherapy systems, to offer customers a
new, broad array of health care information products for clinical,
administrative, outcomes, and decision support purposes. Growing
at about 30 percent per year, IMPAC expects sales of approximately
$28 million for this fiscal year ending September 29. Varian
Medical Systems expects the acquisition of the company to be
accretive in fiscal 2001.
Under the terms of the agreement, which has been approved by the
board of directors of each company, Varian Medical Systems will
acquire privately held IMPAC Medical Systems through a pooling of
interests. Varian Medical Systems will issue approximately 3
million common shares and 300,000 options in exchange for all
IMPAC common and preferred shares and options. This equates to an
enterprise value of approximately $121 million and an equity value
of approximately $135 million based on yesterday’s closing price.
IMPAC will become a wholly owned subsidiary of Varian Medical
Systems. The agreement is expected to close within 60 days subject
to regulatory clearance and satisfaction of customary conditions.
“This is an important step forward for cancer patients, cancer
treatment centers, and for our investors,” said Richard M. Levy,
president and CEO of Varian Medical Systems. “IMPAC has been
growing sales and profits since its inception. It will strengthen
our financial performance and help to accelerate our growth in new
markets.
“The addition of IMPAC’s strong management and software
engineering team creates a significant new dimension to our
solutions for cancer treatment,” Levy added. “We are looking
forward to offering our customers the IMPAC software platform for
practice management, electronic medical records, and decision
support in addition to Varian Medical Systems’ comprehensive suite
of radiation treatment imaging, planning, simulation, and delivery
systems for the clinic. This is a dynamic and complementary
combination that addresses an intensifying need for integrated
information systems and software that can lead to faster
proliferation of the most efficient and best cancer treatment
practices, including IMRT (intensity modulated radiation
therapy).”
According to the agreement, IMPAC will operate under the direction
of current IMPAC President and CEO Joseph K. Jachinowski, who will
continue as president of IMPAC while becoming a corporate vice
president of Varian Medical Systems. IMPAC will assume
responsibility for integrating and marketing Varian Medical
Systems’ VARiS® clinical management software in addition to
marketing its current product lines. This combined software
business, which will be known as Varian IMPAC Medical Systems, is
expected to have fiscal 2000 revenues approaching $50 million.
“We are extremely excited about the avenues this transaction opens
for the advancement of cancer therapy,” said Jachinowski. “Each
company is a leader in its respective field, and together we can
provide clinicians with more treatment management and delivery
solutions, in less time, and with a greater level of integration
than previously possible. And our Internet-based disease
management and outcomes analysis initiatives could significantly
reduce the cost and effort required to treat cancer patients.”
Founded in 1990, IMPAC is headquartered in Mountain View,
California. It has approximately 120 employees throughout the
United States. IMPAC’s flagship product, Multi-ACCESS™ Oncology
Management System combines electronic charting software for
radiation, surgery, and chemotherapy with practice management
applications, including registration, scheduling, billing, and
accounts receivable. The company also supplies image management
products as well as integrated decision support tools, including
the CansurFacs®, and PREMIER™ Cancer Registry Systems, and the
National Oncology Database™ (NODB) containing more than 1.6
million cancer cases.
Integrated Solutions
More than half of U.S. cancer patients receive radiotherapy as
part of increasingly complex and multi-faceted treatment
strategies. The IMPAC acquisition is the latest action in a series
of steps by Varian Medical Systems to offer integrated solutions
to the broader market for managing, diagnosing, and treating
cancer.
In November 1999, Varian Medical Systems and General Electric
Medical Systems announced a program to integrate diagnostic
imaging with advanced radiotherapy. This program is focusing
directly on the need for high-resolution, multi-modality images of
tumors and surrounding anatomy as a prerequisite for precise
planning and effective delivery of IMRT. IMRT is already
demonstrating exceptional improvements in cancer control and
reduction in complications compared to conventional therapies for
certain groups of patients. Varian Medical Systems also recently
announced the first delivery of its Generation 6 system that fully
integrates treatment planning, delivery, and verification for
advanced radiotherapy, including IMRT.
“The combination of IMPAC with Varian Medical Systems adds a
significant new dimension for the benefit of cancer patients,”
said Levy. “We are now better positioned to deal with a very
complex disease that requires doctors and patients to sort through
multiple diagnostic and treatment modalities with an immense
number of variables. It is critical that the entire oncology
community has easy access to the latest information and clinical
tools in order to offer patients the best possible treatment. With
the addition of the IMPAC team, Varian Medical Systems is prepared
to address the needs of this emerging market.”
Outlook
For fiscal 2000, the transaction is expected to be neutral to
earnings per share before accounting for $5 million to $6 million
in one-time transaction costs that will be taken in the fourth
quarter. For fiscal 2001, the IMPAC business should contribute
approximately $0.03 per share to earnings before accounting for
revenue and cost benefits.
Asante Partners LLC is acting as financial advisor to Varian
Medical Systems on this transaction, and Robertson Stephens is
acting as financial advisor to IMPAC Medical Systems.
Forward Looking Statements
This press release contains "forward-looking" statements based on
current expectations that involve risks and uncertainties. Actual
results and the timing of certain events may differ significantly
from those projected in these forward-looking statements due to
factors listed below and those detailed under "Managements’
Discussion and Analysis of Financial Condition and Results of
Operations - Certain Factors Affecting The Company's Business" in
the Annual Report on Form 10-K for the fiscal year ended October
1, 1999, and from time to time in our filings with the Securities
and Exchange Commission. These risks and uncertainties include the
successful finalization of the acquisition; future success depends
to a significant extent on the continued service of certain key
managerial, technical, and engineering personnel and the ability
to attract and retain such personnel; the Company’s products are
subject to rigorous government regulation including the provisions
of the U.S. Food, Drug and Cosmetic Act; the ability to operate
efficiently post acquisition and merger; whether the market
continues to accept the products of Varian Medical Systems and
IMPAC Medical Systems and demand them in increasing amounts;
whether competitive products will reduce our sales or force us to
cut prices; and how changing economic conditions in our markets
and foreign currency fluctuations will affect us.
Varian Medical Systems, Inc., (NYSE:VAR) of Palo Alto, California,
is the world’s leading manufacturer of integrated cancer therapy
systems which are treating thousands of patients per day. The
company is also a premier supplier of X-ray tubes and flat-panel
digital subsystems for imaging in medical, scientific, and
industrial applications. Varian Medical Systems employs
approximately 2,300 people who are located at manufacturing sites
in North America, Europe and in its 40 sales and support offices
around the world. In its most recent fiscal year ended October 1,
1999, Varian Medical Systems reported sales of $590 million.
Additional information is available on the company’s web site at
http://www.varian.com.
IMPAC
Medical Systems, Inc. is the leading provider of integrated
clinical and administrative management systems for cancer
specialists. Specializing in the development of practice
management, electronic medical record, image management and
decision support software, IMPAC offers practical solutions that
help healthcare providers better manage the process of delivering
care. IMPAC is privately held and is based in Mountain View,
Calif. Founded in 1990; IMPAC systems are utilized by over 20,000
clinicians to manage the daily care of more than 50,000 cancer
patients. For more information about IMPAC Medical Systems’
products and services, please call 650-623-8800 or visit
http://www.impac.com. |
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Marketing Communications:
Michelle Arnold
IMPAC Medical Systems, Inc.
650-623-8883
pr@impac.com
http://www.impac.com
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