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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 21, 1998
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Varian Associates, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-7598 94-2359345
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State or Other Jurisdiction (Commission) (I.R.S. Employer
of Incorporation) File Number) Identification No.)
3050 Hansen Way, Palo Alto, CA 94304-1000
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (650) 493-4000
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Inapplicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
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On August 21, 1998, Varian Associates, Inc. (the "Registrant") announced
a plan, subject to certain conditions, to divide the Registrant into three
separate public companies. A copy of the Registrant's press release with respect
to the announcement is attached hereto as Exhibit 99 and incorporated herein by
reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits
Exhibit
Numbers Description of Exhibit
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99 Press Release of Varian Associates, Inc. issued
on August 21, 1998
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VARIAN ASSOCIATES, INC.
By: /s/ Joseph B. Phair
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Name: Joseph B. Phair
Title: Vice President, General Counsel
and Secretary
Dated: August 21, 1998
3
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EXHIBIT INDEX
Exhibit
Numbers Description of Exhibit
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99 Press Release of Varian Associates, Inc. issued on
August 21, 1998
4
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EXHIBIT 99
VARIAN 50 YEARS
NEWS RELEASE
VARIAN ASSOCIATES, INC., 3050 HANSEN WAY, PALO ALTO, CALIFORNIA 94304-1000
http://www.varian.com
FOR INFORMATION CONTACT;
Gary Simpson (650) 424-5782
[email protected]
FOR IMMEDIATE RELEASE
August 21, 1998
VARIAN ASSOCIATES PLANS REORGANIZATION TO CREATE THREE INDEPENDENT BUSINESSES,
ENHANCE COMPETITIVENESS, VALUE
Palo Alto, Calif. -- Varian Associates, Inc., today announced that its
Board of Directors has approved the development of a detailed plan to reorganize
the company's core businesses in health care systems, semiconductor equipment,
and instruments into three separate public companies.
Under the plan, Varian would spin-off two of the three businesses, with
shareholders receiving stock in the new entities commensurate with their
holdings immediately prior to the time of the distribution. The company said it
will seek stockholder approval of the final plan as well as a favorable ruling
from the U.S. Internal Revenue Service confirming the tax-free nature of the
spin-offs for both Varian and its stockholders.
Chairman and Chief Executive J. Tracy O'Rourke said that the
reorganization is the result of an extensive analysis and will give the
management of all three businesses better ability to focus on their respective
markets, customer needs, costs, and growth opportunities. The plan will allow
each business greater freedom to organize its capital structure, allocate
resources, and design strategies appropriate to its particular situation. He
added that the management teams of the independent businesses would also be able
to design compensation programs targeted to their specific circumstances and
performance, and thus will be better positioned to attract and retain key
personnel.
Although the three businesses all have historical ties to Varian's rich
heritage of technological innovation, O'Rourke noted that there is no longer a
material synergy between any of the operations. Each of the three now has
distinctly different products and customers and must contend with entirely
different competitive forces and business cycles.
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Varian's Health Care Systems business is organized around two major
product lines -- radiation oncology equipment for treating cancer and x-ray
tubes for various diagnostic uses. It had fiscal 1997 sales of $472 million and
has plants in California, Utah, Illinois, and South Carolina in the U.S. in
addition to production centers in England, France, Switzerland, and Finland.
With over 3,500 systems in service, the business ranks as the world's largest
supplier of radiotherapy equipment as well as the leading supplier of x-ray
tubes for original equipment and replacement use.
Varian's Instruments business is a major manufacturer of analytical and
research instrumentation for industrial and scientific applications. Its
activities also include a line of vacuum pumps and leak detection equipment as
well as a state of the art circuit board manufacturing center. These ventures
posted combined 1997 sales of $527 million and include factories in Arizona,
California, Colorado, and Massachusetts in the U.S. along with plants in
Australia, Italy, and The Netherlands.
Varian's Semiconductor Equipment business makes and services ion
implantation systems, a key step in the chip manufacturing process. Its 1997
sales totaled $424 million, and it has manufacturing and R&D facilities in
the U.S. (at two Massachusetts locations), Japan, and Korea. This operation is
the world's leading supplier of ion implant systems, with over 2,500 systems
shipped to chip manufacturers worldwide.
In addition to greater flexibility and sharper focus, O'Rourke said
Varian's Board believes the plan will also enhance shareholder value by more
fairly recognizing the inherent worth of the company's disparate core
businesses.
Although Varian has enjoyed considerable operational and financial
success since the Board brought O'Rourke in to lead a turnaround in 1990 --
including three consecutive record years in 1995-97 -- it has also suffered from
the "conglomerate discount" that Wall Street assigns to firms with diverse
businesses. As an illustration, the price of Varian's stock currently trades at
a discount to those of peer companies in all three of its core businesses
despite its significantly improved performance.
The company's overall results are also often inordinately influenced by
factors in a single area such as the volatility of the semiconductor industry
where the current down-cycle has helped to push its stock price as much as 50%
or more below its historical high.
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O'Rourke said the reorganization will have a minimal effect on the
approximately 7,100 employees in the company's operating units. While most of
the employees at Varian's Palo Alto, California headquarters office are expected
to migrate to new positions in one of the three independent companies, he said
some jobs will inevitably become redundant when the reorganization has been
accomplished. Those persons will be provided with appropriate severance
benefits.
Varian's chairman added that further details on the reorganization and
spin-off of the newly independent businesses will be released periodically over
the next six to nine months as part of the process of securing shareholder
approval for the proposal. Warburg Dillon Read LLC is advising Varian on the
planned reorganization.
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Varian Associates, Inc., is a $1.4 billion NYSE company headquartered in Palo
Alto California. Press announcements and other information about the company are
available on the World Wide Web at the URL http://www.varian.com
