Quality not quantity for M&A

Posted on November 18, 2014 by Sally

Published in Raconteur’s M&A 2015 Outlook in The Times

High-value global deals are leading the way in a mergers and acquisitions drive powered by cash-rich corporates, writes Sally Percy

Quality rather than quantity has been the defining global trend in corporate M&A in 2014. According to data from financial information provider Mergermarket, 12,693 transactions had taken place worldwide by the start of November, down from 14,511 for the same period in 2013. In contrast, total deal values have leapt by more than 10 per cent.

This jump in values can be partly attributed to the string of so-called “mega-deals” that have been agreed in 2014. These include the sale of French telecoms giant SFR to cable company Numericable, the merger of US pharmaceutical companies Actavis and Forest Laboratories, and US conglomerate General Electric’s acquisition of the energy business belonging to French rail company Alstom.

Targeted giving is tax-efficient

Posted on October 23, 2014 by Sally

Published in The Times

Companies that want to make a difference in the world, while reducing their tax bills, are setting up charitable foundations, writes Sally Percy

Charitable foundations are a popular option for companies wishing to be philanthropic in a tax-efficient way. Entrepreneurs, in particular, tend to favour them when they want to channel profits from their businesses into targeted worthwhile causes.

“Foundations are being set up by individuals who have made a lot of money from their companies,” says Kate Sayer, partner of charity audit firm Sayer Vincent. “They see a foundation as a good way to give structure to their charitable giving.”

By establishing a charitable foundation and making cash donations to that foundation, a company can enjoy the same tax benefit that it would if it made donations to any other charity. In other words, it can offset its giving against corporation tax.

Route to the top

Posted on October 6, 2014 by Sally

Published in The Treasurer

What does it take to reach the giddy heights of group treasurer? Sally Percy investigates

At some point in their career, most people who work in treasury are likely to have weighed up their chances of becoming group treasurer.

Often it’s an ambition that junior entrants to the profession have at the outset. But other treasurers may be drawn to it later, perhaps because they’ve had an epiphany that, despite the other options open to them, treasury is what suits them best.

The first thing to point out is that the role of group treasurer is extremely broad. Some treasurers, who work in smaller organisations, will effectively already be their own organisation’s ‘group treasurer’ because they are the only person doing treasury tasks there. Others may work for a company that has a treasury team numbering 20 or 30 people, and where the group treasurer is regarded as a senior member of the management team.

Continue Reading… (PDF)

King of clean

Posted on September 15, 2014 by Sally

Published in The Treasurer

Working for pest control and hygiene giant Rentokil Initial has enabled James Kelly to fast-track his career. He shares his thoughts on the route to treasury success with Sally Percy

James Kelly admits that he’s become a clean freak since joining Rentokil Initial in 2010. Now head of treasury at the FTSE 250-listed pest control and facilities management giant – which maintains company washrooms among other services – he reveals that Rentokil employees get “a lot of information” about hygiene. Unsurprisingly then, he’s “slightly obsessive” about washing his hands, a fixation that has also afflicted his wife, who is an avid hand washer, too.

But there is, of course, a lot more to Kelly than clean hands. His ascent up the treasury career ladder has been impressively rapid, given that he’s only worked in the profession for just seven years.

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Knowing how to seal the deal

Posted on May 22, 2014 by Sally

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.”

One page fits all

Posted on April 8, 2014 by Sally

Published in Accounting and Business

Lengthy business plans don’t guarantee success for SMEs, strategy expert Deri Llewellyn-Davies told a recent ACCA event. Sally Percy reports

Back in 2007, Deri Llewellyn-Davies completed the legendary Marathon des Sables, a gruelling six-day ultra-marathon through the Sahara Desert. It’s widely considered the toughest foot race on earth.

Racing with Llewellyn-Davies were a blind man and a man with one leg. ‘It made me realise that we can achieve anything in life,’ he told delegates at an ACCA UK event on lean business planning in February. ‘The relevance of my adventures to business were uncanny. To achieve something like that you need strategy. But writing long business plans doesn’t help with strategy. You need to to plan quickly, adapt quickly and execute.’

Llewellyn-Davies, who is founder and CEO of business development consultancy Business Growth International, believes that the digital era has ushered in the ‘most exciting time in history’ for SMEs. ‘There are two billion people coming online over the next two years,’ he pointed out, adding that finance is the ‘centre of the entire strategy piece’.