Varian Medical Systems announced it has signed an agreement to acquire all the outstanding shares of Sirtex Medical Limited (ASX: SRX) (“Sirtex”), an Australia-based global life sciences company focused on interventional oncology therapies, that is listed on the Australian Securities Exchange, for A$28 per share in cash. On a fully diluted basis, this represents a total equity purchase price for the acquisition of approximately A$1,585M (approximately US$1,283M as of the date of this release). The acquisition has been unanimously approved by the Board of Directors of each company and the Sirtex Board of Directors has agreed to unanimously recommend that Sirtex shareholders approve the transaction, provided that an independent expert, to be retained by Sirtex, considers the transaction to be in the best interests of Sirtex shareholders and in the absence of a superior offer.
This acquisition of a global leader in radioembolization extends Varian’s leadership in radiation medicine, expands Varian’s addressable market into interventional oncology, and is consistent with Varian’s long-term growth and value creation strategy. Varian expects to leverage its capabilities in treatment planning and delivery, image guidance and processing, oncology practice management software, and radiation safety in combination with Sirtex’s interventional oncology platform to provide customers of both companies with a wider range of cancer care solutions.
“This acquisition is the latest step in Varian’s long-term strategy to become a global leader in multi-disciplinary integrated cancer care solutions,” said Dow Wilson, CEO of Varian. “The combination of the two companies will expand the reach of the Sirtex platform by making it more broadly available to the clinical community. Our companies share a common vision of a world without fear of cancer, and we look forward to completing this acquisition and positively impacting more patients’ lives around the world.”
Sirtex’s lead product is a targeted internal radiation therapy for certain liver cancers. Approximately 80,000 doses of SIR-Spheres® Y-90 resin microspheres have been supplied to treat patients with liver cancer at over 1,090 medical centers in over 40 countries. It has PMA approval from the U.S. Food & Drug Administration (FDA), the European Union (CE Mark) and Australia’s Therapeutic Goods Administration (TGA). Sirtex has manufacturing capabilities in the United States, Singapore and Germany.
Sirtex generated annual revenues of A$234mm in the fiscal year ended June 30, 2017. Sirtex has approximately 300 employees worldwide and maintains sales and distribution operations primarily in the United States, Europe and Asia.
Transaction and Financial details
Varian plans to finance the acquisition using cash on hand as well as proceeds from borrowings. The transaction, which is expected to close in late May 2018, is subject to the approval of the Sirtex shareholders, the Federal Court of Australia and other customary closing conditions, including applicable regulatory approvals. Varian expects this acquisition to be accretive to earnings per share in the first full fiscal year after the closing of the transaction.
J.P. Morgan Securities LLC is acting as financial advisor and Norton Rose Fulbright is acting as legal counsel to Varian.
