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EXHIBIT 99.1
FOR INFORMATION CONTACT:
Spencer Sias, (650) 424-5782
[email protected]
FOR IMMEDIATE RELEASE
VARIAN MEDICAL SYSTEMS TO ACQUIRE IMPAC MEDICAL SYSTEMS
ACQUISITION ACCELERATES VARIAN'S MOVE INTO HIGH GROWTH HEALTH CARE INFORMATION
SYSTEMS FOR RADIATION AND MEDICAL ONCOLOGY AND RELATED AREAS; TRANSACTION TO BE
ACCRETIVE IN 2001
PALO ALTO, California, 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.
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VARIAN MEDICAL SYSTEMS TO ACQUIRE IMPAC MEDICAL SYSTEMS PAGE 2
"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(R) 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(TM) 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(R), and
PREMIER(TM) Cancer Registry Systems, and the National Oncology Database(TM)
(NODB) containing more than 1.6 million cancer cases.
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VARIAN MEDICAL SYSTEMS TO ACQUIRE IMPAC MEDICAL SYSTEMS PAGE 3
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
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VARIAN MEDICAL SYSTEMS TO ACQUIRE IMPAC MEDICAL SYSTEMS PAGE 4
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.
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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 WWW.VARIAN.COM VMS017
