Siemens Healthineers to buy Varian in $16.4bn deal

By: Patrick Gorton, Shivaum Bapu, Gurneek Gill (UCL) and Roshni Padhi, Amarins Laanstra-Corn (Stanford)


 

Overview of the deal


Acquirer: Siemens Healthineers

Target: Varian Medical Systems

Total Transaction Size: $16.4 Billion

Closed date: Expected first half of 2021

Target Advisor: Goldman Sachs


On August 2nd, 2020, Siemens Healthineers agreed to buy Varian Medical Systems in a deal that values the US maker of devices and software for cancer treatments at $16.4bn in the biggest medical acquisition of the year. The German medical technology company offered $177.50 a share for the California-based business; a 24% takeover premium.


The deal would give Siemens a sizable market share in the rapidly growing field of cancer treatment where it has little presence currently, giving the deal clear strategic rationale. The purchase is expected to have a positive effect on EPS within the first 12 months of the closing.


Healthineers will finance the acquisition through a $17.9bn bridge loan from Siemens AG. That will eventually be refinanced by a share sale by Healthineers with Siemen’s stake in the firm declining to 72% from 85%.


‘‘The deal is a leap in the fight against cancer and a leap in our overall impact on healthcare. The combination means more effective and efficient medical care.’’ Bernd Montag, Siemens Healthineers CEO.



Company Details: Siemens Healthineers


Siemens Healthineers, the healthcare division under Siemens AG, was founded in Erlangen, Germany in 1847. Rebranded from Siemens Healthcare in 2016, Siemens Healthineers has become one of the leading providers in healthcare and medical solutions for the 21st century. As the parent company for smaller medical technology subsidiaries, their portfolio has grown to include imaging and diagnostic equipment, disease testing, advanced therapies, and service platforms for healthcare management. In previous years Siemens Healthineers has successfully publicly acquired nine corporations, with products ranging from fertility treatments and ultrasound imaging systems to molecular testing equipment. In Siemens Healthineers’ mission of “expanding medical precision, transforming delivery care, and digitalizing healthcare,” the corporation has gone on to develop over 18,00 patents and hire over 50,000 employees in 70 countries.


Founded in 1847 and headquartered in Erlangen, Germany

CEO: Bernd Montag

President: David Pacitti (North America)

Number of Employees: 54,100

Market Cap: $48.34bn

EV: $40.68bn

LTM Revenue: $14.96bn