Accuray acquires TomoTherapy Incorporated

Accuray acquired TomoTherapy Incorporated for approximately $277 million, a transaction completed in June 2011, structured as cash and stock.

TomoTherapy Incorporated operates in Radiation oncology, is based in Madison, Wisconsin, USA, had revenue of about Combined 2010 revenue of the two companies exceeded $400 million (about 30% from service of the installed base). TomoTherapy (Nasdaq: TOMO), headquartered in Madison, Wisconsin, developed advanced radiation therapy systems for cancer care, best known for its helical TomoTherapy platform for image-guided, intensity-modulated radiation therapy (IG-IMRT). The acquisition combined TomoTherapy's IG-IMRT systems with Accuray's CyberKnife radiosurgery platform. Consideration was $4.80 per TomoTherapy share, paid as $3.15 in cash plus 0.1648 shares of Accuray common stock per share, valuing the deal at roughly $277 million and representing a 30.8% premium to TomoTherapy's March 4, 2011 closing price.

The transaction strengthens Accuray's position as the leading innovator in the field of radiation oncology and enhances its growth strategy, combining best-in-class technologies from two high-growth companies serving complementary patient populations treated by the same medical specialty.

TomoTherapy's helical IG-IMRT installed base more than doubled Accuray's system count (from 226 to more than 550 systems across 32 countries), adding recurring service revenue and a complementary treatment modality. Accuray targeted combined operating expense savings of $25 million in fiscal year 2013, mainly from corporate overhead and marketing, and expected the deal to be accretive to earnings in the fiscal year beginning July 1, 2012. TomoTherapy became a wholly-owned subsidiary of Accuray; Accuray committed to maintaining a strong presence in Madison, Wisconsin, TomoTherapy's operating and corporate headquarters.

Advisory firms were not disclosed for this transaction.