Varex Imaging Announces \$490 Million Debt Refinancing and Redemption of Senior Secured Notes

Key Highlights for Investors

• Varex Imaging Corporation (Nasdaq: VREX) has successfully completed a major debt refinancing, entering into a new \$490 million Credit Facility.
• The Credit Facility includes:
  • A \$350 million secured term loan facility
  • A \$100 million secured revolving credit facility
  • A \$40 million secured delayed draw term loan facility
• Maturity Date: All facilities mature on March 13, 2031.
• Lead Arranger and Agent: Zions Bancorporation, N.A. acted as lead arranger, bookrunner, administrative agent, and collateral agent for the transaction.
• Redemption of Senior Notes: Varex has irrevocably deposited funds with the trustee to redeem its outstanding \$368 million in 7.875% Senior Secured Notes due 2027. The redemption occurred on March 16, 2026.
• Termination of Previous Credit Line: The company terminated its previous \$155 million revolving credit facility.
• Interest Rate Details: Borrowings under the Credit Agreement bear interest at a variable rate based on the Secured Overnight Financing Rate (SOFR) plus an applicable margin (2.50% at closing). An interest rate swap was executed to fix the SOFR component at 3.65%.
• Improved Capital Structure: The refinancing is expected to reduce annualized cash interest expense by more than \$7 million, reflecting both a lower interest rate and an \$18 million reduction in outstanding debt.
• Transaction Costs: The refinancing used approximately \$42 million in cash, including \$18 million net debt reduction, \$7 million call premium, \$12 million in accrued interest, and \$5 million in transaction fees.
• Financial Flexibility: Management expects the changes to strengthen the balance sheet, improve cost of capital, and support improved free cash flow generation.

Details and Analysis

Varex Imaging Corporation, a leading innovator in X-ray imaging components, has made a substantial move to optimize its capital structure and reduce financing costs. On March 16, 2026, the company announced the successful closing of a new \$490 million Credit Facility, replacing its prior credit arrangements and providing significant financial flexibility for the years ahead.

The new Credit Facility comprises a \$350 million secured term loan, a \$100 million revolving credit facility, and a \$40 million delayed draw term loan. This five-year facility, led and arranged by Zions Bancorporation, N.A., consolidates and replaces the company’s previous \$155 million revolving facility and supports the redemption of all \$368 million in outstanding 7.875% Senior Secured Notes due 2027.

In connection with the refinancing, Varex utilized approximately \$42 million in cash. Notably, this outflow included a net \$18 million reduction of outstanding debt, a \$7 million call premium for early redemption of the notes, \$12 million in accrued interest, and \$5 million in transaction fees.

Interest Rate Structure: The new facility features a variable rate based on SOFR plus an applicable margin (currently 2.50%), with the company entering into a swap agreement to fix the SOFR component at 3.65%. This move provides interest rate stability and predictability for future cash flows.

Based on management’s projections, these actions are expected to reduce annualized cash interest expense by more than \$7 million, a meaningful benefit to free cash flow and earnings going forward. The company believes this will also improve its ability to invest in core business initiatives and drive long-term shareholder value.

Shareholder Considerations and Potential Impact on Share Price

• Reduced Interest Expense and Debt: The refinancing lowers both the company’s annual interest cost and its total outstanding debt. These improvements directly benefit net income and cash flow, and can support a higher share price.
• Enhanced Financial Flexibility: The new, larger revolving credit facility and delayed draw term loan provide flexibility to support future growth or weather challenges, which may be viewed positively by investors.
• Strengthened Balance Sheet: The redemption of high-coupon debt and the shift to lower-cost facilities strengthen the company’s balance sheet, potentially improving credit ratings and investor confidence.
• Potential Risks: Shareholders should note that interest rates under the new agreement remain variable (except for the swapped SOFR portion), and the company’s net leverage ratio could affect future margins. Early termination of the interest rate swap or increased borrowings could elevate future interest costs.

About Varex Imaging Corporation

Varex Imaging Corporation is a leading designer and manufacturer of X-ray imaging components, including X-ray tubes, digital detectors, and associated image processing solutions. Its products are critical to both medical and industrial X-ray systems, with a global presence spanning North America, Europe, and Asia, and approximately 2,400 employees worldwide.

Forward-Looking Statements

This article contains forward-looking statements, including expectations regarding reduced interest expense, increased financial flexibility, and the ability to invest for long-term shareholder value. Actual results may differ materially due to risks such as higher-than-expected borrowing, changes in interest rates, or other factors as detailed in the company’s filings with the Securities and Exchange Commission.

Contact Information

For further information, contact:
Christopher Belfiore
Director of Investor Relations, Varex Imaging Corporation
801.973.1566 | [email protected]

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult with professional advisors before making investment decisions. The views expressed are based on public information and management statements as of the date of this article and are subject to change without notice.

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