Teledyne to buy Varex Imaging for $1.1 billion in cash deal

Teledyne Technologies agreed to buy X-ray imaging maker Varex for about $1.1 billion, or $18.90 a share in cash.

Teledyne Technologies agreed to buy Varex Imaging for about $1.1 billion, or $18.90 a share in cash, expanding its X-ray imaging business into oncology and high-radiation detection.

"While Teledyne and Varex serve similar customers with related technologies, our products are uniquely complementary with minimal overlap," Robert Mehrabian, executive chairman of Teledyne, said. "For example, while Teledyne produces X-ray detectors, we do not provide detectors suited for high-radiation environments such as oncology, as does Varex."

Varex shares jumped 50 percent to $18.60 in premarket trading, implying a premium of roughly 52 percent over the undisturbed price. The boards of both companies unanimously approved the transaction, which is expected to close in early 2027 pending regulatory approvals and Varex stockholder consent.

The deal gives Teledyne access to Varex's X-ray tubes, flat panel and photon counting detectors, high-voltage interconnects and imaging software used in medical diagnostic imaging, non-destructive inspection, security and vehicle inspection systems. Varex, headquartered in Salt Lake City, employs about 2,400 people across North America, Europe and Asia.

Filling the Gaps in Teledyne's Imaging Portfolio

Teledyne entered healthcare with the 2011 acquisition of DALSA, a maker of low-dose, high-resolution CMOS-based X-ray detectors, and expanded in 2017 with e2v, a supplier of magnetrons to cancer radiotherapy OEMs. Varex adds the X-ray tubes for radiography, fluoroscopy and computed tomography that Teledyne has never produced, plus advanced photon counting detectors for healthcare and industrial inspection.

"Joining Teledyne marks an exciting new chapter for Varex," Sunny Sanyal, president, chief executive and director of Varex, said. "Our X-ray technologies fit naturally alongside Teledyne's product portfolio, and its resources will help us accelerate adoption of our advanced imaging solutions."

Teledyne, based in Thousand Oaks, California, is a leading supplier of digital imaging products and software, instrumentation, aerospace and defense electronics, and engineered systems, with operations mainly in the United States, the United Kingdom, Canada and Western and Northern Europe. The Varex purchase extends that footprint into a medical imaging components market spanning diagnostic radiology, computed tomography, oncology and industrial non-destructive testing.

A Consolidating Medical Imaging Market

The acquisition continues consolidation in medical imaging components, where X-ray detector makers face rising demand from oncology, security screening and industrial inspection applications. For Teledyne, the deal deepens a healthcare portfolio spanning detectors, vacuum electronics and imaging software, letting it compete more directly with larger medical imaging suppliers.

The all-cash offer locks in a substantial gain for Varex shareholders after the stock had traded near $12.40 before the announcement, a premium that reflects the scarcity of X-ray tube and detector manufacturing capacity. Evercore is acting as exclusive financial adviser and Orrick, Herrington & Sutcliffe as legal counsel to Varex. Latham & Watkins and McGuireWoods are advising Teledyne.

This article is for informational purposes only and does not constitute investment advice.