Photo of Khris Wilczek, AT Capital Markets, Dave Pugh, Treasurer and Beth Haney, AT Global Treasury Operations.
David Pugh
Treasurer
Founded in 1954 as part of Eli Lilly and Company, Elanco Animal Health is a premier animal health company that innovates, develops, manufactures and markets products for pets and farm animals. The company supplies its products and services in more than 90 countries worldwide and operates in 41 international markets.
in partnership with
Value of strong relationships delivers book transfer and integrates acquisition in just six months
The challenge
In 2019, less than a year after its initial public offering (IPO), Elanco announced an acquisition of Bayer Animal Health, which would increase the size of the company by 50%. As a new public company still operationally tied to its former parent, Elanco realised it would take a monumental effort from the treasury team and respective banking partners to navigate the increase in complexity and integrate the business into their global operations.
The solution
In partnership with its banks and consultants, J.P. Morgan, Citibank, and Deloitte, the company executed an ambitious and challenging project expeditiously as follows:
- Closed a complex acquisition transaction during the height of a global pandemic less than a year after the deal was announced.
- Stood up and integrated a separate enterprise resource planning (ERP) system supporting the Bayer operations with 70 new accounts for 35 legal entities, comprehensive payables and receivables solutions, a new in-house bank (IHB), and a notional pool.
- Effectively implemented a new regional cash management structure in EMEA in approximately six months, navigating Brexit and an ever-changing landscape.
“Our banking partners have been running alongside us since our IPO. It has not been a slow jog but a flat-out sprint for two years. They brought us their ‘A’ teams and their consistent support and dedication to our initiatives are contributing factors to our success. We are truly appreciative of their partnership,”, says Beth Haney, Assistant Treasurer and Senior Director Global Treasury Operations.
One of the most challenging aspects of the deal was preparing for the closing in August 2020. For various logistical reasons, a Saturday closing date was required, and the transaction had to be settled within a few minutes so that funds could be invested.
These challenges presented a unique relationship management challenge. Establishing a process that took needs and constraints into account and working within a restrictive timeline, Elanco worked closely with its banking partner to rapidly execute an ambitious plan.
Best practice and innovation
Elanco, in close partnership with the bank, devised an innovative strategy for accomplishing the unique parameters of the deal closing with Bayer. The teams formulated a solution that could take advantage of two separate time zones (US and Germany). The transaction was initiated on Friday 31st July at 6:01pm ET, which was Saturday 1st August, 12:01am CET. To execute the transaction quickly, both the Elanco and Bayer teams leveraged a J.P. Morgan account to execute a book transfer, and the transaction was executed seamlessly in a matter of minutes.
Key benefits
- Collaborative approach leveraged strong relationships.
- Integration completed in just six months.
- Simple, creative and effective solution.
The Adam Smith Awards is the industry benchmark for best practice and innovation in corporate treasury. The 2021 Awards attracted a record-breaking 309 nominations spanning 40 countries. To find out more please visit: https://treasurytoday.com/adam-smith-awards.
