Dentsply to exit medical imaging by selling Gendex and Eureka units

Varian signs deal to buy Eureka X-Ray assets

Dentsply International said this month that it plans to divestits medical operations in a move to concentrate on its core dentalbusiness. The company has put x-ray vendor Gendex Medical, tubemanufacturer Eureka X-Ray Tube and orthopedic bone cement developerCMW on the block.

Shortly after the announcement, Varian Associates of Palo Alto,CA, said that it had signed an agreement to acquire the assetsof Eureka, which is based in Arlington Heights, IL. Dentsply,of Des Plaines, IL, has not yet announced an agreement to sellGendex.

The divestiture caps two years of frenzied merger and acquisitionactivity on the part of Gendex and Dentsply. Gendex purchasedEureka X-Ray Tube from Siemens in September 1992 and a few monthslater announced a plan to merge with Dentsply (SCAN 9/23/92 and2/10/93). In January 1993 Gendex bought the mammography line ofFinnish vendor Soredex.

The divestiture does not represent a retreat for Dentsply,according to Edwin J. McDonough, former Gendex president. Thecompany is planning to focus its resources on its dental businessand will use proceeds from the sale to reduce debt. McDonoughis purchasing Eureka's collimator and high-voltage cable businessand plans to run it as a separate company.

In buying Eureka's Arlington Heights facility, Varian is addinga line of low-end x-ray tubes to its existing high-end tube line,according to Robert Kluge, Varian vice president and general managerof x-ray tube products. Eureka and Varian already share many ofthe same OEM customers but manufacture tubes at different pricepoints, so the acquisition should be a good fit, he said.

Varian plans to run the Arlington Heights facility as a manufacturingplant as opposed to a separate business, and the Eureka name willmost likely be retired. Varian will probably retain most of theworkers at the facility. The facility had annual sales of about$20 million, compared to about $100 million in Varian's x-raytube business, Kluge said.

The Eureka purchase is part of Varian's strategy to expandits presence in the medical industry, according to Kluge. Varianformed a Health Care Systems group to spearhead the drive (SCAN3/2/94 and 3/24/93).