PALO ALTO, Calif., June 26, 2002 - Varian Medical Systems, Inc.,(NYSE:VAR) today announced an agreement to acquire MDS Nordion's (NYSE:MDZ, TSX:MDS) business for HDR brachytherapy a minimally invasive procedure for eradicating cancerous tumors with radiation. The acquisition will expand Varian Medical Systems' capability to offer hospitals and free standing clinics a complete range of HDR brachytherapy services and products, including the MDS Nordion line of GammaMed™ afterloaders. Varian Medical Systems will pay approximately $11 million in cash for the business. "Coupled with Varian Medical Systems' existing successful brachytherapy business, this acquisition enables our company to offer customers the broadest range of delivery systems and applicators for HDR brachytherapy and significantly strengthens our ability to serve international markets particularly Europe," said Dick Levy, president and CEO of Varian Medical Systems. "We will have products for all price ranges, a wide array of applicators for every clinical need, and an installed base of more than 550 clinics that form the foundation for a strong service business with a global reach. We gain some natural synergies in which more products and services can be offered to customers of both businesses." "The sale of our HDR brachytherapy business allows MDS Nordion to focus on our comprehensive Oncentra™ suite of oncology treatment planning, record and verify and information management products as well as the Theratron™ teletherapy and Gammacell™ blood irradiator product lines," says Ken Johnson, Senior Vice President, Oncology Software Solutions, MDS Nordion. "We will be working together with Varian Medical Systems to ensure a smooth transition for those customers who use GammaMed™ products." Varian Medical Systems currently supplies its advanced SmartSeed™ system, incorporating the VariSource™ afterloader and the company's BrachyVision™ 3D treatment planning software for very precise, image-guided HDR brachytherapy. The acquisition will add two afterloader models the three channel GammaMedplus™ 3/24 and the 24-channel GammaMedplus™ that will be available at low- and mid-range prices with 2D, applicator-based planning systems. "We will offer customers a choice of delivery systems and a selection of more than 100 clinically proven applicators," said William Hyatt, vice president and general manager of Varian Medical Systems' brachytherapy business unit, which operates within the company's Ginzton Technology Center. Through the combined business, Varian Medical Systems will offer brachytherapy delivery systems, radioactive sources, applicators, treatment planning software, and service. Brachytherapy is the delivery of radiation therapy through the placement of one or more tiny radioactive sources in or around a cancerous tumor. The technique is designed to deliver a large dose of radiation to the tumor while sparing surrounding healthy tissue, often as a boost to external beam radiotherapy treatments or as a primary treatment for other diseases such as gynecological cancers. Radioactive sources are placed within the tumor through catheters or rigid applicators that have been inserted into the treatment site. HDR brachytherapy uses a robotic device, or afterloader, to transport a wire with a high-energy, radioactive source on it's tip, through a catheter to the tumor site. The wire with the radioactive source is moved, under computer control, within the catheter, thereby delivering a specified dose distribution. The wire is then withdrawn into the afterloader. HDR brachytherapy is becoming a more important modality for the growing number of cancer cases throughout the world. It is being used to treat almost all intracavitary and intraluminal sites, including prostate, gynecological, cervix, lung, esophagus, rectum, bile duct, nasopharynx, and breast cancers. Varian Medical Systems is the world's leading supplier of non-invasive systems for treating cancer with external beam radiation, including SmartBeam™ IMRT (intensity modulated radiation therapy). "By expanding our technology and product offerings for both external beam radiotherapy and brachytherapy, we expect to address all clinical needs for radiation therapy," said Levy. Radiation therapy is used to treat more than half of all cancer patients in the United States. Together with Varian Medical Systems' existing business, this acquisition will result in a $30-35 million annual brachytherapy business for the company. The company expects the acquisition to be neutral for the remainder of fiscal 2002 and slightly accretive in fiscal 2003. The transaction is expected to be closed by mid-July and is not subject to any pre-closing regulatory filings. Varian Medical Systems or MDS Nordion brachytherapy customers who want additional information regarding this transaction, products and services should call 888-666-7847.