Varian Associates announced a plan Friday to split up its businesses into three separate public companies following an extensive analysis of its semiconductor equipment, health care systems, and instruments divisions.
The company said there was no longer enough synergy between the three businesses to keep them together. Varian's semiconductor-equipment business has focused its efforts on ion implantation systems after selling off its thin-film operations to Novellus Systems last year for $150 million in cash.
Earlier this year, Varian VAR acquired Genus's high-energy ion-implantation equipment line for $25 million and additional payments.
During Varian's 1997 fiscal year, ended Sept. 30, the semiconductor-equipment business had sales of $424 million. Varian's instruments business was the company's largest revenue-producing unit with $527 million, followed by the health care systems business with $472 million.
Details of the plan were not available from the Palo Alto, Calif., company, which plans to discuss the spin-off of operations during a conference call with media and analysts next Wednesday.
The name of the three companies has not yet been determined, according to a Varian spokeswoman.
In announcing the plan, Varian chairman and CEO J. Tracy O'Rourke said the reorganization would give management of the three new companies greater ability to focus on their markets and growth opportunities. He also said each of the new companies will be able to structure capital spending for their businesses and create compensation programs for employees to attract and retain key personnel.
The Varian chairman said more details on the spin-off will be released periodically during the next six to nine months.
Warburg Dillon Read is advising Varian on the reorganization.