A German medical tech giant just made healthcare history by paying $16.4 billion cash to buy a San Francisco-area startup.
Siemens Healthineers announced on Sunday that it will acquire Varian Medical Systems, a Palo Alto-based healthtech startup that uses AI, machine learning and data analysis to diagnose and treat cancer.
The deal represents the highest healthcare acquisition of 2020, Bloomberg reported, and it values Varian significantly higher than its $13 billion average market trading value so far this year.
The combined company aims to create a platform that doctors and nurses can use to screen, diagnose and treat cancer, and that patients can use to find post-cancer treatment support.
Healthineers CEO Bernd Montag called Varian “an icon in our industry” during a press call with reporters on Sunday, according to Reuters. The deal is Healthineers’ first acquisition since the company split from parent Siemens in 2018.
“If you put it into perspective, we achieved a sensible price,” Montag said during the call.
Healthineers foresees “significant growth” in demand for personalized diagnosis and therapy planning, as the prevalence of cancer will nearly double between 2010 and 2030, according to the International Agency for Research on Cancer’s forecast.
The transaction is expected to close in the first half of 2021, and is subject to approval by Varian’s board, shareholders and regulators.
Varian CEO Dow Wilson said “the board is confident that this is the right path forward for Varian.”
“In addition to delivering immediate and compelling value to our shareholders, the combination with Siemens Healthineers brings us even closer to realizing our transformative vision of a world without fear of cancer,” Wilson said in a statement.
Varian will continue operating under its current name following the transaction.
