Accuray closes $277 million TomoTherapy merger

Accuray Inc. (NSDQ:ARAY) completed its $277 million acquisition of TomoTherapy Inc. (NSDQ:TOMO), tying the bow on a deal first announced in March 2010.

The closing roughly doubles Accuray’s footprint in the radiation oncology market. The Sunnyvale, Calif.-based radiosurgery device maker is significantly smaller than its new acquisition, with 200 fewer employees than TomoTherapy’s 636. But Accuray’s 2010 revenues were about 6 percent higher than TomoTherapy’s, at $206 million compared to $195 million. And Accuray’s finances are in much better shape: ARAY was profitable in 2010, posting just under $7 million in net income, compared to a $30 million net loss for TomoTherapy.

Accuray will immediately recoup more than half of the purchase price by assuming TomoTherapy’s cash reserves, to boot. As of Dec. 31, 2010, TOMO had $270 million in assets, including $152 million in cash and equivalents and $163 million in shareholder equity.

“The successful closing of this transaction is a significant accomplishment and an important milestone in Accuray’s history. Scale is important in the capital equipment industry, and today Accuray’s installed base more than doubles, generating greater opportunity for service revenue and for replacement business over time to customers who have purchased these best-in-class technologies,” Accuray CEO Euan Thomson said in a prepared release. “We appreciate the support of our investors and the contributions of our stakeholders who helped us achieve this important transaction. We look forward to working toward achieving our goals as a stronger, unified company.”

The deal increases Accuray’s installed base from 226 systems to more than 550 in 32 countries; its total headcount will be more than 1,000 worldwide. Company officials said they will maintain a “significant presence” in Madison, Wis., where TomoTherapy’s home base.

Shares of TomoTherapy common stock will stop trading on NASDAQ before the market opens June 13.