On 30 January, 2018 Sirtex announced it had entered into a binding Scheme Implementation Deed with Varian Medical Systems, Inc. (NYSE:VAR) under which it was proposed that Varian acquire 100% of the shares in Sirtex by way of a Scheme of Arrangement (the Scheme) for A$28.00 per share.
Under the terms of the Scheme, Sirtex shareholders will be entitled to receive A$28.00 in cash per Sirtex share (Scheme Consideration), subject to all applicable conditions being satisfied or waived and the Scheme being implemented.
The Scheme Consideration of A$28.00 cash per share represents:
- 49% premium to the Sirtex closing price of A$18.83 per share on 29 January 2018, being the last trading day prior to announcement of the Scheme.
- 53% premium to the volume weighted average price (VWAP) since Sirtex's trading update on 17 January 2018
- 60% premium to the 1-month VWAP to 29 January 2018
- 77% premium to the 3-month VWAP to 29 January 2018
The offer price implies a fully diluted market capitalisation for Sirtex of approximately A$1.58 billion1 and an enterprise value of approximately A$1.49 billion2. This represents a multiple of approximately 18.6x the mid-point of the forecast FY18 Earnings Before Interest, Tax, Depreciation & Amortisation (EBITDA) contained in Sirtex's trading update of 17 January 2018.
Subject to the Independent Expert determining that the Scheme is in the best interests of Sirtex shareholders, and in the absence of a superior proposal, the Directors of Sirtex unanimously recommend that Sirtex shareholders vote in favour of the Scheme and intend to vote shares in their control in favour of the proposed Scheme.
1 Based on 56.6 million fully diluted shares on issue, comprising 55.8 million existing shares and 0.8 million performance rights.
2 Based on unaudited net cash at 31 December 2017 of A$92.8 million and no adjustment made for any other liabilities
- Background to the Scheme
- About Varian Medical Systems, Inc.
- Indicative Timetable of Events
- ASX Announcement on Proposed Acquisition & Scheme Implementation Deed
- Sirtex & Varian Investor Calls on the Proposed Acquisition
- Contact Information Relating to the Scheme
Background to the Scheme
In late 2017 Sirtex received a number of unsolicited, non-binding acquisition proposals.
The Board of Sirtex elected to engage with these parties to explore the potential for an offer that could be in the best interests of Sirtex shareholders. In conjunction with this decision, Sirtex's advisers also contacted a number of additional parties to test potential interest in submitting alternative proposals to acquire the Company.
A number of parties were provided with access to due diligence information and Sirtex senior management to facilitate proposals that fully reflected the long-term potential of Sirtex as well as the benefit of synergies that would potentially be available to acquirers.
The Board of Sirtex has assessed in detail the proposals received and believes that the Scheme is in the best interests of shareholders.
The Interim Chairman of Sirtex, Dr John Eady said "In recommending the Scheme, we have considered the future potential prospects and the risks associated with an investment in Sirtex. Whilst we remain confident that the Company would continue to have a successful stand-alone future , we believe that the material premium provided by Varian and the certainty of all cash consideration is an attractive outcome for shareholders."
Dow Wilson, the Chief Executive Officer of Varian, said "Sirtex is a highly complementary strategic fit with our existing solutions for the treatment of cancer. We are excited by the opportunity to expand Sirtex's business and continue to provide physicians and patients around the world with smart, efficient, and high-quality care."
About Varian Medical Systems, Inc.
Varian Medical Systems, Inc. (Varian) is a leader in developing and delivering cancer care solutions. Headquartered in Palo Alto, California, Varian employs approximately 6,500 people around the world. Varian is listed on the New York Stock Exchange (NYSE:VAR) and has a market capitalisation of approximately US$11.8 billion. In the 2017 financial year, Varian recorded revenues of approximately US$2.7 billion, and net earnings of US$257 million.
For more information please visit: www.varian.com
Indicative Timetable of Events
|Dispatch of Scheme Booklet to Sirtex shareholders||early/mid April 2018|
|Scheme Meeting||early/mid May 2018|
|Second Court date||mid May 2018|
|Effective Date||mid May 2018|
|Implementation Date||late May 2018|
ASX Announcement on Proposed Acquisition & Scheme Implementation Deed
Sirtex & Varian Investor Calls on the Proposed Acquisition
Sirtex Investor Conference call (30 Jan 2018) on proposed acquisition by Varian
Varian Presentation on the proposed acquisition of Sirtex on 30 Jan 2018
Varian Webcast on the proposed acquisition of Sirtex held on 30 Jan 2018
Contact Information Relating to the Scheme
Analysts/Shareholders seeking further information on the Scheme can contact Sirtex as follows:
Dr Tom Duthy
Global Head of Investor Relations & Corporate Development
Telephone: +61 2 9964 8427
Shareholders seeking to confirm shareholding(s) in Sirtex at any time must go through Sirtex’s registry service provider, Link Market Services Limited
Investors can visit the Sirtex Investor Centre at:
You will need your Security Holder Reference Number (SRN) or your Holder Identification Number (HIN) and postcode when you log-in online. The Investor Centre provides a variety of important holding information and communication preferences.
Alternatively, investors may contact Link Market Services as follows:
Level 12, 680 George Street, Sydney, NSW 2000