Combining is a non-destructive method of acquiring new suits. Most suits can be acquired by combining (notable exception being "basic" units, and some original units), and most suits can be combined (similar exceptions). Some suits like the GN Flag can only be obtained by combination.
To combine two units, go to the crew set up page (first option under exit) from the Operation Room. From the crew set up page, go to the unit page (second option). From the unit page, go to the first option (with a picture of two MSs with a plus sign in between them. From there, choose the first unit you want to combine, then every suit that you can't combine it with will be greyed out. Suits that you can combine with to unlock a new suit will have an orange border and suits that you can combine with, but the resulting suit has already been unlocked. Once you select the two suits that you want to combine, you will unlock the new suit for purchase.