Varian to acquire German proton therapy system supplier ACCEL Instruments

11 January 2007

Palo Alto, California, USA. Varian Medical Systems, Inc., (NYSE:VAR) has signed an agreement to acquire ACCEL Instruments GmbH, a privately-held supplier of proton therapy systems for cancer treatment and scientific research instruments.

The acquisition will enable Varian to offer products for delivering image-guided, intensity modulated proton therapy for selected cancer patients. Varian will invest approximately $30 million to acquire 100% of ACCEL, including its debt.

In addition to producing particle therapy products, ACCEL produces specialty linear accelerators and other physics instruments for research and science applications. ACCEL, which is based in Bergisch Gladbach near Cologne, Germany, has about 250 employees.

“With this acquisition, we can meet the needs of customers who have begun to ask us for proton therapy capabilities that supplement their existing radiotherapy systems,” said Tim Guertin, president and CEO of Varian Medical Systems. “This leverages our existing technology in treatment planning, image guidance and cancer informatics and it enables Varian to offer all the products needed for delivering proton therapy. We expect that we can build a several hundred million dollar proton therapy business over time.”

“We are excited about the technology and value we see in ACCEL which has a unique scanning beam technology that is ideal for intensity modulated proton therapy,” Guertin added. “Also with ACCEL’s superconducting cyclotron technology, we expect to be able to develop and tailor more affordable proton therapy systems designed for small, single-room centres as well as large, multi-room facilities.”

ACCEL has commissioned its newly developed superconducting medical cyclotron for proton therapy at the Paul Scherrer Institute outside Zurich. Work is nearing completion on another installation at the Rinecker Proton Therapy Center in Munich and Varian hopes to complete commissioning that system this year.

Varian anticipates the acquisition will add annualized revenues of approximately $30 million in fiscal year 2007. Based on guidance given at the end of fiscal 2006, management expects that the addition of ACCEL’s operations will reduce earnings per diluted share by about 3 percent in fiscal year 2007, be about neutral in fiscal year 2008, and be accretive thereafter. The business will report to Varian Vice President Lester Boeh, who is responsible for managing Varian’s portfolio of emerging businesses.

The transaction is conditioned upon receipt of certain regulatory approvals, and is expected to close in late January.

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