Scientific instrument maker Agilent Technologies said Monday it will buy Varian Inc. for $1.5 billion in cash, or $52 per share.
Agilent is paying a premium of 33 percent to Friday's $39.20 closing price for Varian. Varian, of Palo Alto, California, reported $1.01 billion in revenue in fiscal 2008. Scientific instruments accounted for $838.7 million in sales and the remainder came from vacuum technologies.
The boards of both companies approved the deal, which is expected to close by the end of the year pending approval from shareholders and regulators.
Santa Clara, California-based Agilent said the acquisition gives it more products in the life sciences, environmental and materials businesses, and believes the deal will add to its profits in 2010.
Agilent estimates $75 million in cost savings from the combination.
Varian announced its earnings Monday, reporting net income of $13.5 million, or 47 cents a share, for the fiscal third quarter ended July 3, up 18 percent from $11.4 million, or 38 cents per share, a year earlier. Revenue sank 20 percent, to $196.6 million from $244.4 million.
Excluding one-time items, such as amortization costs, its profit slipped to 52 cents per share, down from 54 cents per share a year ago.
Analysts expected 50 cents per share and $201.3 million in revenue, according to Thomson Reuters.
Varian's scientific instrument revenue fell 16 percent to $167.9 million, and vacuum technologies revenue decreased 34 percent to $28.7 million.
Agilent shares gained 39 cents to close at $22.66, while Varian rose $11.41, or 29 percent, to close at $50.61.
