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Varian Medical Systems Inc. is acquiring privately owned Calypso Medical Technologies Inc. for $10 million, the medical device and software company said Monday.

Calypso, based in Seattle, creates products and software used to do real-time tracking of tumors during cancer treatment. The company does much of its work in prostate cancer treatment and is developing a lung cancer treatment product.

Varian, based in Palo Alto, Calif., said the acquisition will complement to its motion management technology. The purchase price could increase based on sales of Calypso products over the next 2 1/2 years.

The deal is expected to close in early October.

Calypso generates more than $15 million in annual revenue from sales and service of its products, according to the companies. It has more than 110 of its tracking systems installed in North America and Europe. It will continue to operate in Seattle, according to Varian.

Shares of Varian fell $1.44, nearly 3 percent, to close at $52.44 Monday and were unchanged in after-hours trading.

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