Varex Imaging, a medical imaging components manufacturer, announced it has successfully completed a major debt refinancing through a new credit agreement totaling $490 million.
The new financing package includes a $350 million secured term loan, a $100 million revolving credit facility, and a $40 million delayed draw term loan, all maturing in March 2031. Zions Bancorporation served as lead arranger, bookrunner, and administrative agent for the transaction.
As part of the refinancing, Varex used the proceeds to redeem its $368 million in outstanding 7.875% senior secured notes due 2027 and terminated its prior $155 million revolving credit facility. The company also deployed approximately $42 million in cash, including an $18 million net reduction in debt, $7 million in call premiums, $12 million in accrued interest, and $5 million in transaction fees.
The new credit facility carries interest based on SOFR plus a margin tied to the company’s leverage ratio. Varex has also entered into an interest rate swap that fixes the SOFR component at 3.65%, with an initial margin of 2.50%.
The refinancing is expected to reduce annual cash interest expense by more than $7 million, driven by both lower interest rates and reduced overall debt levels. The company said the transaction enhances financial flexibility, improves free cash flow generation, and supports continued investment in its core business.
Varex, headquartered in Salt Lake City, designs and manufactures X-ray imaging components including tubes, digital detectors, and software solutions used in medical, industrial, and security applications. The company employs approximately 2,400 people globally.
KEY QUOTE:
“We are excited to have successfully closed the new credit agreement and redeemed our senior secured notes, strengthening our balance sheet and improving our cost of capital. We expect that the reduced debt and lower interest rate will improve financial flexibility, support improved free cash flow generation and enable continued investment in our core business while prioritizing long-term shareholder value.”
Sam Maheshwari, Chief Financial Officer of Varex Imaging Corporation
