Teledyne Technologies and Varex Imaging Merge In A Deal Worth $1.1bn

On 10 August, Teledyne Technologies and Varex Imaging Corporation announced a definitive merger agreement under which Teledyne will acquire all outstanding Varex shares for $18.90/share in cash, accounting for an aggregate value of approximately $1.1bn. Both boards approved unanimously, and the deal is expected to close in early 2027, subject to regulatory approval and a Varex shareholder vote.

Teledyne (Thousand Oaks, California) makes digital imaging products, instrumentation, aerospace and defence electronics, and engineered systems. Varex (Salt Lake City, Utah), has around 2,400 employees and manufactures X-ray tubes, digital detectors, high voltage interconnects, and imaging software for medical diagnostic, industrial inspection and security applications. Components are sold to OEMs (original equipment manufacturers) rather than a consumer facing product.

The deal is structured as a US public-company cash merger under a definitive Merger Agreement (all cash, all stock for cash acquisition of a NASDAQ listed target by an NYSE listed acquirer). It requires a Varex special stockholder meeting to approve the merger and a proxy statement filing with the SEC (an SEC-filed document giving shareholders information needed to decide how to vote on a corporate transaction.), plus customary antitrust and regulatory clearances. This is not a scheme of arrangement or tender offer. It is a standard one-step statutory merger.

There is no disclosure that the deal is debt-financed. It is described as an all cash deal by Teledyne, which is a well capitalised strategic acquirer. No third party lender was named. It is likely that the deal is self-funded, but this is still unconfirmed.

Teledyne Technologies is being advised by Latham & Watkins LLP, while Varex is advised by Orrick, Herrington & Sutcliffe LLP.

The deal is significant as it indicates consolidation in medical and industrial X-ray imaging components. Varex is a major supplier of the underlying hardware used to generate, detect and connect X-ray systems. Teledyne's acquisition brings those capabilities into a larger diversified technology company. That can give Teledyne more control over an important part of the imaging supply chain. Varex is also a classic B2B “component supplier” rather than a branded end-product company. Its customers are primarily OEMs (original equipment manufacturers) that incorporate Varex components into finished medical, industrial or security systems. So Teledyne is buying an upstream technology position that can be embedded across many customers' products. Finally, Varex serves medical diagnostics, industrial inspection and security, while Teledyne also operates across imaging, instrumentation, aerospace and defence. That diversification matters because weakness in one market can potentially be offset by demand in another.