Published in The Times
Corporate treasurers play a critical role in supporting mergers and acquisitions, particularly for deals involving high-growth markets, writes Sally Percy
Mergers and acquisitions (M&A) have bounced back on to the corporate agenda in 2014 after tailing off dramatically in the wake of the financial crisis. According to figures from Thomson Reuters, the value of global M&A activity was up 54 per cent in the first quarter of this year, compared with the same period in 2013, with deals totalling $710 billion.
This resurgence in M&A is adding to corporate treasurers’ already long to-do lists since they are increasingly influential in setting business strategy. While treasurers have always been involved in arranging and structuring the funding that underpins M&A, boards are now drawing on their expertise in areas such as cash and liquidity, regulation and risk management before a deal is even on the table.
Arguably, input from treasury is key even when an acquisition is little more than a twinkle in the chief executive’s eye. Treasury will want to manage the company’s debt maturity profile to ideally prevent it from having to undertake refinancing activity at the same time an acquisition is being carried out.
“The market may not necessarily be open at the time you want to complete a transaction,” observes David Tilston, group finance director of banknote substrate maker Innovia. “So you don’t want to find yourself in a situation where you want to do a deal, but you don’t have the money available.”