Richardson Electronics Announces Strategic Transaction for its Richardson Healthcare Business Unit

Rhea-AI Summary

Richardson Electronics (NASDAQ: RELL) has announced a strategic asset sale of its Richardson Healthcare business unit to DirectMed Imaging. The transaction, completed on January 24, 2025, includes a 10-year global supply agreement where Richardson will provide DirectMed with repaired Siemens CT X-ray tubes.

The company will continue manufacturing ALTA CT X-ray tubes for DirectMed for approximately 12-18 months. The remaining healthcare operations, primarily focusing on CT X-ray tube manufacturing and repair, will be integrated into the company's PMT reportable segment.

This strategic move aligns with Richardson's focus on reallocating assets to support their growing Green Energy Solutions business, with management expecting the transaction to simplify operations and improve their financial model.

Positive

• Strategic asset reallocation to support fast-growing Green Energy Solutions business
• Secured 10-year global supply agreement for Siemens CT X-ray tubes
• Business simplification through consolidation of remaining healthcare operations into PMT segment

Negative

• Divestment of majority of healthcare business unit indicates exit from a significant business segment

News Market Reaction

+1.52%

1 alert

+1.52% News Effect

On the day this news was published, RELL gained 1.52%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Majority of Richardson Healthcare Assets Sold to DirectMed Imaging

Remaining Healthcare Business to be Consolidated into the Company’s PMT Strategic Business Unit

LAFOX, Ill., Jan. 24, 2025 (GLOBE NEWSWIRE) -- Richardson Electronics, Ltd. (NASDAQ: RELL), a global provider of engineered solutions for renewable energy and other power management applications, today announced the strategic asset sale of a majority of Richardson Healthcare to DirectMed Imaging (“DirectMed”). The transaction closed on January 24, 2025.

Under the terms of the transaction, Richardson Electronics sold a substantial portion of the Richardson Healthcare reportable segment to DirectMed. Additionally, Richardson Electronics entered into an exclusive 10-year global supply agreement in which Richardson will supply DirectMed with repaired Siemens CT X-ray tubes. Richardson Electronics will also continue manufacturing ALTA CT X-ray tubes for DirectMed for approximately 12 to 18 months. The remaining assets and operations of the Richardson Healthcare reportable segment, primarily CT X-ray tube manufacturing and repair, will be consolidated into the Company’s PMT reportable segment.

“Today’s announcement is aligned with our strategic priorities by reallocating assets to support our fast-growing Green Energy Solutions business. We look forward to an ongoing partnership with DirectMed, which we believe is a win-win for both companies. In addition, we believe today’s announcement will simplify our business, improve our financial model, and allow us to prioritize profitable opportunities within our higher growth markets,” said Edward J. Richardson, Chairman, CEO, and President.

Additional information on the transaction will be found in an 8-K to be filed with the U.S. Securities and Exchange Commission.

FORWARD-LOOKING STATEMENTS

This release includes certain “forward-looking” statements as defined by the Securities and Exchange Commission. Statements in this press release regarding the Company’s business that are not historical facts represent “forward-looking” statements that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K filed on August 5, 2024, and other reports we file with the Securities and Exchange Commission. The Company assumes no responsibility to update the “forward-looking” statements in this release as a result of new information, future events or otherwise.

About Richardson Electronics, Ltd.

Richardson Electronics, Ltd. is a leading global manufacturer of engineered solutions, green energy products, power grid and microwave tubes, and related consumables; power conversion and RF and microwave components, including green energy solutions; high-value replacement parts, tubes, and service training for diagnostic imaging equipment; and customized display solutions. Approximately 50% of our products are manufactured in LaFox, Illinois, Marlborough, Massachusetts, or Donaueschingen, Germany, or by one of our manufacturing partners throughout the world. All our partners manufacture to our strict specifications and per our supplier code of conduct. We serve customers in the alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets. The Company's strategy is to provide specialized technical expertise and "engineered solutions" based on our core engineering and manufacturing capabilities. The Company provides solutions and adds value through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair through its global infrastructure. More information is available at www.rell.com.

Richardson Electronics common stock trades on the NASDAQ Global Select Market under the ticker symbol RELL.

About DirectMed Imaging

DirectMed Imaging is a leading aftermarket diagnostic imaging parts, systems, and service provider. With over 100,000 parts in stock, the company repairs, supports, and sells GE, Siemens, Philips, and Canon/Toshiba MRI, CT, and X-ray parts to healthcare networks, imaging centers, and independent service organizations (“ISOs”) around the world. DirectMed also owns LBN Medical ApS, based in Aalborg, Denmark, a leading reseller of aftermarket medical imaging equipment and parts to customers around the world; and ScanMed, LLC, a leader in MRI coil design, manufacture, and repair. For more information, visit www.DirectMedImaging.com.

For Details Contact:
Wendy Diddell
Chief Operating Officer and GM, Richardson Healthcare
Phone: (630) 208-2323
wendyd@rell.com

Corporate Headquarters
40W267 Keslinger Road
PO BOX 393
LaFox, IL 60147-0393 USA
(630) 208-2200 | Fax: (630) 208-2550

FAQ

What assets did Richardson Electronics (RELL) sell to DirectMed Imaging in January 2025?

Richardson Electronics sold a majority of its Richardson Healthcare business unit to DirectMed Imaging on January 24, 2025.

What is the duration and scope of the supply agreement between RELL and DirectMed?

RELL entered into a 10-year exclusive global supply agreement to provide DirectMed with repaired Siemens CT X-ray tubes.

How long will RELL continue manufacturing ALTA CT X-ray tubes for DirectMed?

RELL will continue manufacturing ALTA CT X-ray tubes for DirectMed for approximately 12 to 18 months.

What will happen to RELL's remaining healthcare operations after the DirectMed sale?

The remaining healthcare operations, primarily CT X-ray tube manufacturing and repair, will be consolidated into the company's PMT reportable segment.

How does the DirectMed transaction align with RELL's strategic priorities?

The transaction aligns with RELL's strategic priorities by reallocating assets to support their fast-growing Green Energy Solutions business and simplifying their business model.