Varian Medical Systems and Mitsubishi Electric have agreed to form a joint venture in Japan and other Asian countries.
In accordance with the October 8 letter of intent, Mitsubishi’s radiotherapy business will be transferred to the joint venture, which will begin operations in February.
The company will sell, service, and support the Palo Alto, CA-based vendor’s full line of radiotherapy products and Mitsubishi’s medical linear accelerators. Varian is the majority owner of the venture, and will acquire Mitsubishi’s share of the firm at the end of the three-year agreement. Sales of Mitsubishi medical linear accelerators will be discontinued after the first two years.
Varian said it expects the venture to contribute $10 million to $12 million in additional annual service revenue, predicting that it will be neutral to earnings in the first year and accretive in ensuing years. The company anticipates its investment in the transaction to be in the range of $18 million to $20 million.
By AuntMinnie.com staff writersDecember 19, 2003
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