After a slow opening month for the third quarter, the merger between Varian Medical Systems (NYSE: VAR) and Siemens Healthineers AG (XETRA: SHL.DE) might bring some spark to the healthcare M&A market. Siemens Healthineers announced it was purchasing Varian for $16.4 billion, the largest deal of the year so far. Siemens Healthineers will acquire all shares of Varian for $177.50 per share in cash, a premium of approximately 24% to the closing price of Varian’s common stock on July 31, 2020. Varian generated trailing 12-month revenues of $3.2 billion and EBITDA of $536.3 million. 

For more than 70 years, Varian has developed, built, and delivered innovative cancer care technologies and solutions to clinical partners worldwide. The company has 10,000 employees across 70 locations, and it will retain its brand name and continue to operate under it. 

The merger will create a multi-disciplinary global healthcare leader with the most comprehensive cancer care portfolio in the industry, offering end-to-end oncology solutions to address the entire continuum of cancer care, from screening and diagnosis to care delivery and post-treatment survivorship. The transaction is expected to close in the first half of the calendar year 2021. 

Varian and Siemens Healthineers have been active buyers in the healthcare M&A space over the years, especially the former. According to DSO, Varian has reported 33 transactions since 2001. Two of the company’s recent deals occurred in the second quarter of 2019 when Varian acquired two companies, Endocare and Alicon for a combined total of $185 million. Endocare, based in Austin, Texas, provides hardware and software solutions supporting cryoablation and microwave ablation. Alicon, based in Hangzhou, China, provides embolic therapy for treating liver cancer. 

Siemens Healthineers, for its part, has reported six deals since 2016. In August 2019, the company acquired Corindus Vascular Robotics, Inc. (NYSE: CVRS), a global leader in robotic-assisted vascular interventions, for $1.1 billion.