Varex Imaging (Nasdaq: VREX) trims debt and locks in $490M credit to 2031
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Varex Imaging Corporation has refinanced its debt by entering into a new Credit and Guaranty Agreement providing a $350 million secured term loan, a $100 million secured revolving credit facility, and a $40 million secured delayed draw term loan, for total commitments of $490 million maturing on March 13, 2031.
The company drew $350 million from the term loan and, together with about $42 million of cash, funded the redemption of $368 million of 7.875% Senior Secured Notes due 2027 and related costs. This reduced outstanding debt by $18 million and is expected to lower annual cash interest expense by more than $7 million.
Borrowings bear SOFR-based variable interest plus a margin tied to Varex’s consolidated net leverage ratio, with an interest rate swap fixing the SOFR component at 3.65% and an initial 2.50% margin. The prior $155 million revolving credit facility was terminated, and the new revolver supports working capital and general corporate purposes.
Positive
- Refinancing lowers cost of debt and extends maturity: Varex redeemed $368 million of 7.875% Senior Secured Notes due 2027 using a new $490 million credit facility, reduced net debt by $18 million, and expects to cut annual cash interest expense by more than $7 million while pushing maturities out to 2031.
Negative
- None.
Insights
Varex replaces high-coupon notes with a larger, cheaper, longer-term credit facility.
Varex Imaging secured a new
The company used about
Interest is now tied to SOFR plus a margin based on the consolidated net leverage ratio, with an interest rate swap fixing SOFR at
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 8-K
___________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 13, 2026
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) | |||||||||||
(Commission File Number) | (I.R.S. Employer Identification Number) | ||||||||||
(Address of principal executive offices) | (Zip Code) | ||||||||||
Registrant’s telephone number, including area code: (801 ) 972-5000
Not Applicable
(Former name or former address, if changed since last report)
___________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b - 2 of the Securities Exchange Act of 1934. Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 | Entry into a Material Definitive Agreement | ||||
On March 13, 2026, Varex Imaging Corporation (the “Company”) and certain of its subsidiaries entered into a Credit and Guaranty Agreement with, among others, the lenders and issuing banks from time to time party thereto, Zions Bancorporation, N.A. dba Zions First National Bank, as administrative agent and collateral agent, Citizens Banks, National Association and Bank of Montreal as co-documentation agents, Zions Bancorporation, N.A. dba Zions First National Bank, as lead arranger and sole bookrunner, and U.S. Bank National Association, Capital One, N.A., Fifth Third Bank, National Association and UMB Bank, N.A. as joint lead arrangers (the “Credit Agreement”).
The Credit Agreement provides for (i) a secured term loan facility in an aggregate principal amount of $350,000,000, (ii) a secured revolving credit facility in an aggregate principal amount of $100,000,000, which includes a $35,000,000 letter of credit sub‑facility and a $20,000,000 swingline sub‑facility, and (iii) a secured delayed draw term loan facility in an aggregate principal amount of $40,000,000 (together, the “Credit Facility”). The facilities mature on March 13, 2031.
Borrowings under the Credit Agreement bear interest, subject to the terms specified therein, at either (i) a rate based on the Secured Overnight Financing Rate (SOFR) plus a margin or (ii) an alternative base rate plus a margin. Loans are priced by reference to a grid based initially on the Company’s consolidated total net leverage ratio. The borrowers’ obligations under the Credit Agreement are initially guaranteed by certain of the Company’s domestic and international subsidiaries, subject to the ability for the Company to cause additional subsidiaries to accede to the Credit Agreement as a guarantor of the borrowers’ obligations thereunder.
The Credit Agreement contains customary affirmative and negative covenants, including a negative pledge, limitations on additional indebtedness, liens, fundamental changes, transactions with affiliates and restricted payments. The Credit Agreement also contains customary financial maintenance provisions, customary provisions for letters of credit and swingline borrowings and optional and mandatory prepayments.
The Credit Agreement also provides for customary events of default, including, among others, non‑payment of obligations; bankruptcy or insolvency events; failure to comply with covenants; breach of representations or warranties; defaults on other material indebtedness; and change of control. The occurrence of an event of default could result in the acceleration of obligations under the Credit Agreement, termination of the commitments and the requirement to cash collateralize outstanding letters of credit.
On March 13, 2026, the Company and the other borrowers drew down $350,000,000 from the term loan facility. Such borrowing proceeds, together with cash on hand, are being used to fund the consideration for the redemption of the 2027 Notes (as defined below) on the Redemption Date (as defined below) and ancillary expenses incurred in connection therewith. The revolving credit facility is available for working capital and other general corporate purposes of the Company and its subsidiaries.
The foregoing summary description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the terms of the Credit Agreement, a copy of which is filed hereto as Exhibit 10.1 and incorporated by reference in this Current Report on Form 8-K.
| Item 1.02 | Termination of a Material Definitive Agreement | ||||
On March 6, 2026, the Company delivered a notice of conditional full redemption (the “Redemption Notice”) relating to the redemption of all its $368,000,000 aggregate principal amount of outstanding 7.875% Senior Secured Notes due 2027 (the “2027 Notes”) on March 16, 2026 (the “Redemption Date”). The 2027 Notes were issued pursuant to a Senior Secured Notes Indenture, dated as of September 30, 2020, among the Company, as issuer, the guarantors party thereto, Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association), as trustee and collateral agent (the “Trustee”) (as amended and supplemented, the “2027 Notes Indenture”). The redemption of the 2027 Notes was conditioned on the closing of the Credit Agreement, which was consummated on March 13, 2026.
Substantially concurrently with the closing of the Credit Agreement, on March 13, 2026, the Company irrevocably deposited with the Trustee, sufficient funds to pay in full the redemption price for the 2027 Notes, plus accrued and unpaid interest to, but excluding, the Redemption Date. Upon deposit of such funds with the Trustee, together with other specified documents delivered on March 13, 2026, the 2027 Notes Indenture was satisfied and discharged in accordance with its terms. As a result of the satisfaction and discharge of the 2027 Notes Indenture, the Company and the guarantors party thereto have been released from their obligations with respect to the 2027 Notes Indenture and the 2027 Notes, except with respect to those provisions of the 2027 Notes Indenture that, by their terms, survive the satisfaction and discharge of such indenture.
Substantially concurrently with the closing of the Credit Agreement, on March 13, 2026, the Company terminated its Revolving Credit and Guaranty Agreement, dated as of March 26, 2024, by and among the Company, Varex Imaging West, LLC, Varex Imaging Deutschland AG, as borrowers, the guarantors party thereto, Zions Bancorporation, N.A. dba Zions First National Bank, as administrative and collateral agent, and the lenders party thereto (as amended, the “Terminated Credit Agreement”). The Terminated Credit Agreement had provided for a senior secured revolving credit facility of up to $155,000,000, made available to the Company and the other borrowers for revolving loans in U.S. dollars and for the issuance of letters of credit. The Terminated Credit Agreement was scheduled to mature on September 26, 2027. There were no outstanding borrowings under the Terminated Credit Agreement at the time of termination.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. | ||||
The disclosure required by this item is included in Item 1.01 above and is incorporated herein by reference.
| Item 8.01 | Other Events | ||||
On March 16, 2026, the Company issued a press release announcing the closing of the Credit Facility. A copy of the press release is filed herewith as Exhibit 99.1 and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. | ||||
(d) Exhibits
| Exhibit No. | Exhibit Description | ||||||||||
| 10.1 | Credit and Guaranty Agreement, dated as of March 13, 2026, by and among, among others, Varex Imaging Corporation, as the parent borrower, certain subsidiaries of Varex Imaging Corporation as borrowers and guarantors, the lenders from time to time party thereto, the issuing banks from time to time party thereto, and Zions Bancorporation, N.A. dba Zions First National Bank, as administrative agent and collateral agent. | ||||||||||
| 99.1 | Press release dated March 16, 2026. | ||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VAREX IMAGING CORPORATION | ||||||||
Dated: March 16, 2026 | By: | /s/ Matthew A Martinez | ||||||
| Matthew A Martinez | ||||||||
| Chief Legal Officer and Corporate Secretary | ||||||||
Exhibit 99.1
VAREX ANNOUNCES SUCCESSFUL COMPLETION OF DEBT REFINANCING
SALT LAKE CITY, March 16, 2026 – Varex Imaging Corporation (Nasdaq: VREX) today announced it has entered into a Credit and Guaranty Agreement (the “Credit Agreement”), dated as of March 13, 2026, which includes a secured term loan facility in aggregate principal amount of $350 million, a secured revolving credit facility in aggregate principal amount of $100 million and a secured delayed draw term loan facility in aggregate principal amount of $40 million (collectively, the “Credit Facility”), providing for aggregate commitments of $490 million and maturing on March 13, 2031. Zions Bancorporation, N.A. (“Zions”) acted as lead arranger and bookrunner for the new Credit Facility and will act as the administrative agent and collateral agent. In connection with the closing, Varex irrevocably deposited funds with the trustee to redeem its $368 million aggregate principal amount of outstanding 7.875% Senior Secured Notes due 2027, with the redemption to occur on March 16, 2026. Varex also terminated its previously existing $155 million revolving credit facility.
“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,” said Sam Maheshwari, Chief Financial Officer of Varex Imaging Corporation. “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,” added Maheshwari.
Borrowings under the Credit Agreement bear interest at a variable rate equal to the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin, which is determined based on the company’s consolidated net leverage ratio. In connection with the financing, the company entered into an interest rate swap that effectively converts the variable SOFR component to a fixed SOFR of 3.65%. As of the closing of the Credit Agreement, the applicable margin is 2.50%.
In connection with the refinancing, the company used approximately $42 million of cash, consisting of an $18 million net reduction in outstanding debt, approximately $7 million in call premium paid to the Senior Secured Note holders, approximately $12 million of accrued interest on the redeemed notes, and approximately $5 million in transaction fees.
The refinancing is expected to reduce annualized cash interest expense by more than $7 million, reflecting lower interest rates and an $18 million reduction in outstanding debt.
Additional information concerning the Credit Facility is disclosed in Varex’s Form 8-K filed with the Securities and Exchange Commission today, March 16, 2026.
About Varex
Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray imaging components, which include X-ray tubes, digital detectors and other image processing solutions that are key components of X-ray imaging systems, as well as X-ray imaging systems for industrial applications. With a 70+ year history of successful innovation, Varex’s products are used in medical imaging as well as in industrial and security imaging applications. Global OEM manufacturers incorporate the company’s X-ray sources, digital detectors, connecting devices and imaging software in their systems to detect, diagnose, protect and inspect. Headquartered in Salt Lake City, Utah, Varex employs
1678 S. Pioneer Road | Salt Lake City, UT 84104 | 801.972.5000
approximately 2,400 people located in North America, Europe, and Asia. For more information visit vareximaging.com.
Forward-Looking Statements
Statements made in this press release that are not historical facts, including statements accompanied by words such as “will,” “believe,” “strengthen,” “improve,” “support,” “enable,” “prioritize,” “expect,” “estimate,” “anticipate,” “increase,” “project,” “can,” “should,” “would,” “could,” “may,” “intend,” “potential,” and other words of similar expression, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s expectations, estimates, assumptions, and projections as of the date of this release and are not guarantees of future performance. Actual results may differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ materially include the need for greater borrowing under the Credit Facility than management’s current expectations, increases in the company’s consolidated net leverage ratio leading to higher interest rates, early termination of the company’s interest rate swap arrangement, and other factors that could cause interest rates to exceed current projections, as well as other risks set forth as risk factors in the company’s filings with the Securities and Exchange Commission, including its Quarterly and Annual Reports. The company cautions you not to place undue reliance on the forward-looking statements contained in this release. The company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.
# # #
For Information Contact:
Christopher Belfiore
Director of Investor Relations
Varex Imaging Corporation
801.973.1566 | investors@vareximaging.com
1678 S. Pioneer Road | Salt Lake City, UT 84104 | 801.972.5000
FAQ
What debt refinancing did Varex Imaging (VREX) announce?
Varex Imaging announced a new Credit and Guaranty Agreement providing a $350 million term loan, $100 million revolving credit facility, and $40 million delayed draw term loan. The $490 million Credit Facility refinances its capital structure and supports ongoing liquidity needs.
How did the new credit facility affect VREX’s existing 2027 senior secured notes?
Varex used $350 million of term loan proceeds plus cash to redeem its $368 million aggregate principal of 7.875% Senior Secured Notes due 2027. Funds were irrevocably deposited with the trustee, satisfying and discharging the notes indenture before the March 16, 2026 redemption date.
What interest rates and swap arrangements apply to Varex’s new Credit Facility?
Borrowings bear a variable rate equal to SOFR plus an applicable margin based on Varex’s consolidated net leverage ratio. The company entered an interest rate swap that fixes the SOFR component at 3.65%, and the initial margin at closing is 2.50% over that fixed SOFR rate.
How much will Varex’s refinancing change its debt and cash interest expense?
The refinancing used about $42 million of cash, including an $18 million net reduction in outstanding debt. Management expects annualized cash interest expense to decrease by more than $7 million, reflecting the lower interest rate environment and the reduced principal balance after redemption.
What happened to Varex Imaging’s previous revolving credit facility?
Varex terminated its prior $155 million senior secured revolving credit facility that was scheduled to mature in 2027. It replaced this with a new $100 million secured revolving credit facility under the Credit Agreement, available for working capital and other general corporate purposes for the company and its subsidiaries.
How does Varex describe the strategic impact of this refinancing?
Varex’s CFO stated the refinancing strengthens the balance sheet, improves the cost of capital, and should support improved free cash flow generation. Management also highlighted that the structure enables continued investment in the company’s core business while prioritizing long-term shareholder value over time.
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