U.S. to bar Varian's purchase of Impac

The Justice Department plans to file suit to block Varian's $135 million purchase of Impac Medical Systems on the grounds that it would reduce competition in the sale of radiation therapy software and equipment.

The government said the merger would substantially reduce competition among vendors of linear accelerators and radiation oncology management systems software.

Varian manufactures integrated cancer therapy systems. Impac makes oncology management systems and also supplies image management applications, including registration, scheduling, billing, and accounts receivable functions. Varian officials viewed the acquisition of Impac as an important move into the healthcare information systems field (SCAN, 6/21/00).

Varian manufactured about 60% of the linear accelerators sold in the U.S. in 1999. The government claims the proposed purchase would force competitors to rely on Varian to supply the software to support their machines and any advances they might introduce, reducing market pressures for innovation and price reductions.

The company reported record fourth quarter (end Sept. 29) sales, profit, and earnings per share. Sales were up 14% at $185 million, compared with $167 million for the same period a year earlier. Varian had sales of $704 million for fiscal 2000, compared with $599 million a year earlier.

Varian is headquartered in Palo Alto, CA. Impac is a privately held company in Mountain View, CA.