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Alliance Imaging planning to fund potential acquisitions without taking on new debt
By Jennifer Lanning Drey
Portland, Ore., May 31 - Alliance Imaging Inc. is continuing to look for acquisition targets but is not interested in adding leverage to the its balance sheet, Paul Viviano, Alliance's chief executive officer, said Thursday during a presentation at the Bank of America 2007 Health Care Conference held in Las Vegas.
Instead, Alliance intends to use what Viviano called its "very strong cash flow" to fund any acquisitions, he said.
Viviano also said Alliance is working to redirect cash generated by its declining mobile MRI business and invest it in what the company considers to be its new growth products, which include its PET/CT and fixed-site imaging center technologies.
"We produce very strong operating cash flow to fund our investments in our growth products and to pay down debt. We'll have cash available for acquisitions, and we pay down debt in a very disciplined manner," Howard Aihara, chief financial officer of Alliance, said during Thursday's presentation.
As Viviano has said in past presentations, Alliance's growth strategy is based on the idea that declining reimbursements due to the Deficit Reduction Act will cause many of its competitors to sell, restructure or close their businesses in 2007.
"We've become very proactive about evaluating acquisition opportunities," he said.
The company has not yet announced any acquisition targets this year.
Alliance had cash and cash equivalents of $30 million at March 31 and total debt of $528 million.
Alliance is an Anaheim, Calif.-based provider of shared-service and fixed-site diagnostic imaging services.
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