Varian Medical Systems, Mitsubishi Electric create joint venture for RT

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Varian Medical Systems Inc. and Mitsubishi Electric Corp. will partner to provide radiotherapy equipment and service in Japan and other Asian countries.

The companies jointly will sell, service and support Varian Medical Systems' line of radiotherapy products and Mitsubishi's medical linear accelerators. Sales of Mitsubishi medical linear accelerators will be discontinued after the first two years of the arrangement. Mitsubishi's radiotherapy service business also will be transferred to the joint venture, which is scheduled to begin in February. The venture also will service Mitsubishi's industrial linear accelerators.

Varian Medical Systems will be the majority owner of the venture and will acquire Mitsubishi's share of the entity at the end of the three-year arrangement.

The joint venture is expected to contribute $10 million to $12 million in additional annual service revenues to Varian Medical Systems, have no effect on earnings in the first year and be accretive in the following years. Varian Medical Systems' investment in the transaction is expected to be in the range of $18 million to $20 million.