Edwards Lifesciences Corp. is loading up with cash and could be in the market for acquisitions.
The Irvine-based heart valve maker generated some $140 million in free cash flow last year, up from about $60 million in 2001, the company’s first year as a public company after spinning off from Baxter International Inc. in 2000.
As of December, Edwards counted $179 million in cash and investments on its balance sheet.
This year, Edwards said it could generate up to $150 million more, said David Erickson, the company’s vice president of investor relations, at Roth Capital Partners LLC’s annual stock conference last month in Dana Point.
When asked what Edwards plans to do with all that cash, Erickson said, “We want to make technology acquisitions that are close to our core business.”
Edwards is the top maker of replacement valves implanted during open-heart surgery.
The company could look at acquiring makers of heart valves, critical care and peripheral vascular disease-treating devices, Erickson said.
Like other device makers, Edwards could need acquisitions to keep its growth going.
In the fourth quarter, Edwards disappointed Wall Street with sales of $250 million, up 5% from a year earlier but below expectations of $253 million.
Edwards’ profits came in ahead of estimates excluding charges at $38.6 million, up about 50% from a year earlier.
Early on, Edwards looked to acquisitions to diversify beyond heart valves. But the company switched gears in 2003 and set out to refocus on heart valves.
The effort has included a handful of buys, including a big one two years ago.
In early 2004, Edwards spent about $125 million to buy Percutaneous Valve Technologies, a developer of a replacement heart valve that didn’t require major surgery.
Smaller buys included separate deals worth $35 million for mitral heart valve repair products from Ev3 Inc. of Plymouth, Minn., and Jomed NV, a defunct European device maker.
The mitral heart valve takes in blood from the lungs.
For more on this story, see the March 6 edition of the Business Journal.
