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BUSINESS COMBINATIONS
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
BUSINESS COMBINATIONS
7. BUSINESS COMBINATIONS

VIE Consolidation

On May 22, 2026 (the “Consolidation Date”), the Company amended several agreements, including an option agreement, with the Consolidated VIE focused on developing therapies for patients with advanced heart failure. The amendments provide the Company with the power to direct its significant activities, specifically the Consolidated VIE’s regulatory process and obligations to absorb losses or receive benefits from the entity. Accordingly, the Company determined it has become the primary beneficiary of this VIE, and it has been consolidated in the Company’s consolidated financial statements as of the Consolidation Date.

Prior to consolidation, the Company held an option to acquire this VIE with a carrying value of $27.5 million and convertible promissory notes with a carrying value of $75.3 million, inclusive of interest (both included in Other Assets). The Company also held this VIE’s preferred equity securities with a carrying value of $45.8 million, which were included in Long-term Investments (together with the option and convertible promissory note, the “previously held interest in the VIE”). Subsequent to the consolidation, the Company has approximately 26.7% ownership of the Consolidated VIE’s outstanding shares.

The consolidation was accounted for as a business combination. Tangible and intangible assets and liabilities acquired were recorded based on their estimated fair values at the Consolidation Date. The excess of the consideration transferred over the fair value of net assets acquired was recorded to goodwill. The previously held interest in this VIE was remeasured to fair value as of the Consolidation Date using an income approach, and the Company recognized a $19.9 million gain in Other non-operating (income) expense, net during the three and six months ended June 30, 2026. Acquisition-related costs were not material and were recorded in Selling, general, and administrative expenses during the three and six months ended June 30, 2026.

The following table summarizes the preliminary fair value of the previously held interest in the VIE, noncontrolling interest and the fair values of the identifiable assets acquired and liabilities assumed (in millions):

Option$42.0 
Notes70.0 
Preferred shares56.6 
Other3.7 
Fair value of Edwards’s investment held in the Consolidated VIE before the business combination172.3 
Fair value of noncontrolling interest(a)
112.4 
Total$284.7 
Identifiable assets acquired and liabilities assumed:
Current assets$3.1 
Property, plant, and equipment, net2.9 
In-process research and development161.5 
Other assets1.7 
Liabilities assumed(7.9)
Deferred tax liabilities(16.2)
Fair value of net assets acquired$145.1 
Goodwill$139.6 
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(a)    Includes the fair value of the noncontrolling interest of $154.4 million, offset by the purchase consideration allocated to the option of $42.0 million, which was ascribed to the noncontrolling interest. The fair value of the noncontrolling interest was estimated by applying an income approach and the option value was estimated using an Option Pricing Model.
The preliminary purchase price allocation in the table above is subject to change during the one-year measurement period as additional information becomes available about the fair value of the assets acquired and liabilities assumed, including in-process research and development (“IPR&D”), goodwill and deferred income taxes. Measurement period adjustments, if any, will be recorded to the assets acquired and liabilities assumed with a corresponding adjustment to goodwill.

Goodwill includes assembled workforce and expected synergies and other benefits the Company believes will result from the consolidation. Goodwill was assigned to the Company’s Europe segment and is not deductible for tax purposes. The acquired IPR&D was recognized as an indefinite-lived intangible asset and will be tested for impairment in future periods until completion or abandonment of the associated research and development efforts. The fair value of the IPR&D and business enterprise value including corresponding noncontrolling interest was estimated using an income approach based on discounted cash flow projections. Significant assumptions included projected revenues, gross margins and expenses, the timing of projected future cash flows, the discount rate, probability of technological success, and the consideration of legal, technical, regulatory, economic, and competitive risks.

The results of operations of the Consolidated VIE have been included in the condensed consolidated financial statements as of the Consolidation Date. Pro forma revenue and earnings have not been presented as the historical and pro forma results of this VIE are not material in relation to the Company’s condensed consolidated financial statements for the periods presented.

Autus Valve Technologies, Inc.

On February 6, 2026 (the “acquisition date”), the Company exercised its option to acquire Autus Valve Technologies, Inc. (“Autus”), a privately held, clinical-stage medical device company developing a pulmonary heart valve for pediatric patients with congenital valve disease. As a result, the Company acquired all outstanding shares of Autus for total consideration of $128.9 million (the “acquisition”). The arrangement also provides for additional consideration of up to $132.5 million, payable upon the achievement of certain regulatory approval milestones and net sales thresholds. As of the acquisition date, the Company recorded a contingent consideration liability of $7.9 million, representing the estimated fair value of the expected payments. The contingent consideration liability is remeasured at fair value each reporting period, with changes in fair value recognized in operating expenses in the condensed consolidated statements of operations. The fair value measurement of contingent consideration is classified within Level 3 of the fair value hierarchy. For additional information, see Note 8.

Prior to the acquisition, the Company paid $11.5 million for an option to acquire Autus, which was recorded in Other Assets using the measurement alternative for equity investment (“previously held interest in Autus”). The Company exercised the option and accounted for the transaction as a step acquisition in accordance with authoritative guidance on accounting for business combinations. Accordingly, the previously held interest was remeasured to fair value as of the acquisition date using an income approach, and the Company recognized a $65.2 million gain in Other non-operating (income) expense, net during the six months ended June 30, 2026. Acquisition-related costs were not material and were recorded in Selling, General, and Administrative Expenses during the six months ended June 30, 2026.
The following table summarizes the preliminary fair value of consideration transferred and the fair values of the assets acquired and liabilities assumed (in millions):

Cash consideration
$35.1 
Fair value of previously held interest in Autus
76.7 
Fair value of contingent consideration(a)
7.9 
Settlement of pre-existing relationships
5.4 
Holdback(a)
3.8 
Total purchase price
$128.9 
Goodwill$52.0 
In-process research and development102.9 
Liabilities assumed, net
(0.8)
Deferred tax liabilities(25.2)
Total purchase price, net of cash acquired$128.9 
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(a)    Represents non-cash investing and financing activities

The preliminary purchase price allocation in the table above is subject to change during the one-year measurement period as additional information becomes available about the fair value of the assets acquired and liabilities assumed, including IPR&D, goodwill and deferred income taxes. Measurement period adjustments, if any, will be recorded to the assets acquired and liabilities assumed with a corresponding adjustment to goodwill.

Goodwill primarily reflects the assembled workforce and expected synergies from the acquisition. Goodwill was assigned to the Company’s U.S. segment and is not deductible for tax purposes. The acquired IPR&D was recognized as an indefinite-lived intangible asset and will be tested for impairment in future periods until completion or abandonment of the associated research and development efforts. The fair value of the IPR&D was estimated using an income approach based on discounted cash flow projections.

The results of operations for Autus have been included in the condensed consolidated financial statements as of the acquisition date. Pro forma revenue and earnings have not been presented as the historical and pro forma results of Autus are not material in relation to the Company’s condensed consolidated financial statements for the periods presented.