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Jefferies Reiterates Buy on Varian Medical Systems (VAR) Following Announced PerkinElmer Deal

December 23, 2016 7:23 AM EST
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Price: $177.07 --0%

Rating Summary:
    8 Buy, 9 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 6 | Down: 3 | New: 1
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Jefferies reiterated a Buy rating and $102.00 price target on Varian Medical Systems (NYSE: VAR) following the company's announced plans to acquire PerkinElmer’s Imaging Components business for $276mn in cash. Varex will fund the transaction with cash drawn from its recently announced $600mm credit facility. As a reminder, Varian will retain $200mn of proceeds from the credit facility, leaving Varex with approximately $124mn in remaining cash post the Perkin transaction; however, the overall balance will likely be higher at spin considering internal cash generation.

Analyst Anthony Petrone commented, "Varex announced plans to acquire PerkinElmer’s Imaging Components business for $276mn in cash. The transaction will add to Varex’s portfolio of flat panel X-ray detector plates, expand it into the adjacent verticals, and be immediately accretive by our math. Overall, the deal sets Varex well heading into the spin early next year and will likely be the first of many tuck-ins as it executes a roll-up strategy of smaller players in the space."

For an analyst ratings summary and ratings history on Varian Medical click here. For more ratings news on Varian Medical click here.

Shares of Varian Medical closed at $90.27 yesterday.



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