PALO ALTO, Calif., Aug. 26, 2011 /PRNewswire/ -- Varian Medical Systems (NYSE: VAR) today announced that it has entered into an agreement with Bank of America, N.A. to repurchase $250 million of its common stock under an accelerated share repurchase program. Concurrently, the company amended its revolving credit facility with Bank of America, N.A. to increase its borrowing capacity from $225 million to $300 million.
Under the accelerated repurchase agreement, Varian will pay $250 million to Bank of America N.A. and receive approximately 3.8 million shares, or 85 percent of the shares to be repurchased based on the closing share price of the company's common stock on August 24, 2011. The total number of shares ultimately repurchased under the agreement will be determined upon final settlement. Varian will either receive additional shares of common stock or under certain circumstances be required to remit a settlement amount payable at Varian's option in cash or common stock, based generally on the volume weighted average share price of Varian's common stock during the next three to six months.
"Accelerated repurchase programs have been an ongoing element of our overall strategy for returning value to our investors," said Tim Guertin, president and CEO of Varian Medical Systems. The program is expected to be accretive to earnings going forward but have minimal impact on fiscal year 2011.
These shares will be acquired under the remainder of a 12 million share repurchase authorization approved by the company's Board of Directors on February 11, 2011 with an expiration at the end of fiscal year 2012. At the conclusion of the accelerated share repurchase program, the company expects that approximately 7.4 million shares will remain under the February 11, 2011 authorization, depending on the company's stock price during the accelerated repu