Thomson also said the two technologies are largely used on separate patients (or the same patient at separate phases of treatment) but could often be owned by the same clinical specialty, meaning the "sales force has twice as many reasons to contact and build relationships with the same customer."

He also thinks that as two relatively small public companies, they carry overhead expenses that are significant relative to their financial size. Combining resources could cut back on those costs.

But perhaps the biggest effects could be in helping to turn around TomoTherapy's previously ailing service business.

Service woes

TomoTherapy, based on technology developed by University of Wisconsin-Madison scientists, had a celebrated IPO. After its May 2007 debut, its shares quickly soared to $25. But in July 2007, its shares peaked at $27.20. In 2008, it went on a steep decline. Before this week's acquisition announcement, it was trading at $3.67.

2008 was a tough year for capital equipment all around: Medicare reimbursement cuts for some procedures had just come into effect the year before, following the Deficit Reduction Act of 2005. The Great Recession had cast a pall over financial markets, tightening the flow of credit. And for TomoTherapy, there was an extra hit: Varian received U.S. Food and Drug Administration clearance for RapidArc, a radiation therapy unit seen as a competitor to the Hi-Art system.

But the company had also been plagued by high service costs due to uneven reliability. "They've had some difficult technology challenges," Thomson said.

"The way they've compensated for that, quite rightly, is to invest in customer support and customer service. They are proactively managing the reliability challenges they have by absorbing the pain themselves, by absorbing the cost pressure by proactively changing out components and making sure they have dedicated service engineers for their systems. That creates a financial burden on their company, and drags down, particularly, their service margins."

The biggest challenge five years ago was the treatment couch, Robertson said, but he said those issues have been resolved. Already, revenues have inched up 5 percent for services, according to the most recent financial statement, released in February.

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