Varex reports stronger third-quarter earnings as imaging technology company agrees to $18.90-per-share cash acquisition.
SALT LAKE CITY, UT – August 10, 2026 (STL.News) Teledyne Technologies has agreed to acquire Varex Imaging Corp. (NASDAQ: VREX) in an all-cash transaction valued at approximately $1.1 billion, a deal that will expand Teledyne’s medical imaging portfolio while bringing an end to Varex’s nearly decade-long run as an independent public company. The acquisition announcement came the same day Varex reported stronger third-quarter fiscal 2026 financial results, giving investors fresh insight into the company’s improving operating performance ahead of the proposed sale.
Under the terms of the merger agreement, Teledyne will pay $18.90 per share in cash for all outstanding Varex shares. The transaction was unanimously approved by the boards of directors of both companies and is expected to close in early 2027, subject to shareholder approval, regulatory clearances, and other customary closing conditions.
The acquisition represents a significant premium over Varex’s Friday closing price of $12.41, sending the stock sharply higher in premarket trading. Shares climbed roughly 50% to about $18.60, trading just below the agreed acquisition price as investors priced in the pending transaction.
Why This Matters
The acquisition combines two companies with complementary imaging technologies serving medical, industrial, aerospace, defense, and security markets.
While Teledyne has built a broad portfolio of digital imaging, sensing, instrumentation, and aerospace technologies, Varex specializes in X-ray tubes, digital detectors, image-processing software, and other critical components used in diagnostic imaging equipment, airport security systems, cargo inspection platforms, and industrial testing applications. According to Teledyne Chairman, President and Chief Executive Officer Robert Mehrabian, the businesses have minimal product overlap while offering significant strategic alignment, particularly in advanced X-ray imaging technologies.
For Varex shareholders, the agreement provides immediate cash value while ending uncertainty surrounding the company’s long-term growth strategy in a competitive medical technology market.
By the Numbers
| Metric | Third Quarter FY2026 |
|---|---|
| Revenue | $211 million |
| Revenue Growth | 4% year over year |
| GAAP EPS | $0.37 |
| Non-GAAP EPS | $0.31 |
| Operating Cash Flow | $21 million |
| Medical Segment Revenue | $134 million |
| Industrial Segment Revenue | $77 million |
The quarterly results demonstrate continued operational improvement despite a mixed economic environment and ongoing uncertainty in global healthcare capital spending.
Strong Quarter Supports Acquisition
Although the acquisition dominated Monday’s headlines, Varex also delivered one of its strongest operating quarters in recent years.
Revenue increased to $211 million, driven by stable demand across both medical and industrial imaging markets. Adjusted earnings more than doubled from the prior-year period, while operating cash flow strengthened to approximately $21 million, reflecting improved profitability and disciplined cost management.
The medical imaging segment generated $134 million in revenue, while the industrial segment contributed $77 million, benefiting from continued demand for cargo screening, security inspection systems, and industrial non-destructive testing equipment.
Varex also disclosed that previously paid U.S. tariffs favorably affected quarterly results after the company received approximately $17 million in tariff refunds. After establishing reserves to reimburse certain customers, the company estimated the refunds produced an approximately $10 million positive impact on gross profit during the quarter.
Because of the pending acquisition, Varex canceled its previously scheduled quarterly earnings conference call and withdrew forward financial guidance. Companies involved in pending mergers commonly suspend forward-looking guidance while awaiting completion of a transaction.
About Varex Imaging
Headquartered in Salt Lake City, Varex Imaging is one of the world’s leading suppliers of X-ray imaging components used by original equipment manufacturers.
The company traces its heritage back more than 70 years and became an independent publicly traded company in 2017 following its separation from Varian Medical Systems. Today, Varex employs approximately 2,500 people across North America, Europe, and Asia, serving customers in healthcare, industrial inspection, security screening, and scientific imaging markets.
Its technologies are incorporated into CT scanners, digital radiography systems, mammography equipment, oncology systems, airport baggage scanners, cargo inspection platforms, and industrial quality-control systems.
Strategic Fit for Teledyne
For Teledyne, the acquisition strengthens an already diversified portfolio of imaging technologies.
The company said Varex’s expertise in high-radiation imaging detectors and X-ray components complements Teledyne’s existing detector technologies while expanding its presence in healthcare imaging.
Varex President and Chief Executive Officer Sunny Sanyal described the transaction as an opportunity to accelerate innovation and expand the adoption of the company’s advanced imaging platforms under Teledyne’s ownership.
Industry analysts have increasingly viewed advanced imaging technologies as attractive long-term investments because of growing demand from hospitals, airport security operators, border agencies, manufacturers, and scientific research organizations.
Stock Performance
Before Monday’s acquisition announcement, Varex was a small-cap medical technology company with a market capitalization of roughly $470 million. The stock traded between approximately $6.76 and $14.56 over the past 52 weeks before surging on news of the acquisition. Analysts had generally maintained a “Hold” consensus rating ahead of the transaction, with expectations focused on gradual operational improvement rather than a takeover.
Following the announcement, the stock traded just below the agreed cash purchase price, reflecting investor expectations that the transaction will close substantially on the announced terms.
Key Risks
Although both companies’ boards have unanimously approved the acquisition, the transaction remains subject to customary closing conditions.
Investors will continue monitoring regulatory approvals, shareholder approval, and any developments that could affect the expected closing timetable.
Until the transaction is completed, Varex will continue operating as an independent company while integrating planning efforts with Teledyne.
What Investors Should Watch
The next major milestones will be regulatory review and shareholder approval of the merger agreement.
Investors will also watch for additional filings with the U.S. Securities and Exchange Commission outlining the transaction, expected timing, and any conditions attached to regulatory approvals.
Unless unexpected issues arise during the approval process, Monday’s announcement effectively shifts investor focus away from quarterly earnings and toward successful completion of the acquisition.
Bottom Line
Teledyne’s agreement to acquire Varex represents one of the more significant medical technology transactions announced this year, combining complementary imaging businesses that serve healthcare, industrial, security, and scientific markets.
While Varex’s third-quarter earnings reflected improving operational performance through higher revenue, stronger profitability, and healthier cash flow, those results were ultimately overshadowed by the acquisition announcement.
For shareholders, the proposed $18.90-per-share cash offer provides immediate value at a substantial premium to the company’s pre-announcement trading price. Assuming the transaction receives the required approvals, Varex will become part of Teledyne’s expanding portfolio of advanced imaging technologies, bringing its nearly ten-year tenure as an independent public company to a close.
Investor Note: This article is for informational and journalistic purposes only and should not be construed as investment, legal, or financial advice. The proposed acquisition remains subject to shareholder approval, regulatory review, and customary closing conditions. Neither company has indicated that completion of the transaction is guaranteed.
