Accuray acquires TomoTherapy

Accuray Incorporated (Nasdaq: ARAY) announced today that it has completed its previously announced acquisition of TomoTherapy Incorporated (Nasdaq: TOMO). The combination creates the premier radiation oncology company, offering best-in-class technologies to fight cancer.  The combined company is focused on developing, manufacturing and selling personalized, leading-edge treatment solutions that revolve around the patient.

"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," said Euan S. Thomson, Ph.D., president and chief executive officer of Accuray. "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."

Accuray now offers radiation treatments tailored to the specific needs of each patient, ranging from high-precision radiosurgery for early-stage and localized disease to image-guided, intensity-modulated radiation therapy for more advanced disease sites throughout the body. These complementary patient populations are treated by the same medical specialty, creating a broader base of sales relationships for the company to leverage. By bringing together the expertise and complementary resources of both companies, Accuray becomes a stronger organization with greater scale to invest in the R&D that will keep it on the leading edge of innovation.

"This acquisition places Accuray in two market segments with good growth prospects and enhances our opportunity to grow shareholder value," said Derek Bertocci, senior vice president, chief financial officer of Accuray. "We expect our new scale will help make revenue more predictable, and assist in making the TomoTherapy service business more efficient and ultimately profitable. Over the next 12 months we plan to make changes with the goal of achieving combined operating expense savings of $25 million in fiscal year 2013, with the majority of savings from corporate overhead and marketing."

With the closing of the transaction, Accuray's installed base increases from 226 to more than 550 Systems, installed in 32 countries. Accuray's total number of employees doubles to more than 1,000 worldwide. Corporate headquarters will remain in Sunnyvale, California, but the company will maintain a significant presence in Madison, Wisconsin, where TomoTherapy's headquarters were located. Euan Thomson will continue to serve as president and chief executive officer of Accuray.

With the closing of the transaction, TomoTherapy common stock will cease trading on NASDAQ before market open on June 13, 2011, and will no longer be listed on NASDAQ.