Photo of Serina Hourican, Bank of America Merrill Lynch, Elaine Wright and Dageria Morgan, Linamar Corporation and Hollie Sharkey, ION Treasury.

Solution delivered in just nine months and all during major acquisition

The challenge

The company had multiple bank accounts which they wanted to rationalise, together with a legacy and quite disjointed treasury operation, required an overhaul. To compound the situation, the company, as part of it’s diversification strategy, had recently been involved in a billion dollar plus acquisition of an agricultural equipment manufacturing company – MacDon Industries. This presented its own challenges of disparate systems and the company wanted to improve its working capital management for a firm operating in 17 countries across the globe.

The solution

Linamar embarked upon a project which addressed the company’s cash management which resulted in 92% of all the company’s bank accounts being reported into its treasury management system. Any bank accounts identified as superfluous were closed and the project focused on: payments; cash management; risk management; debt; in-house banking; cash forecasting and liquidity planning and static data.

Reval is the company’s treasury management system and their cash pooling banks are Bank of America Merrill Lynch, Scotiabank, Bank of Montreal and BNP Paribas. Linamar has a total of 17 financial institutions in it’s bank syndicate. The treasury manages daily an average of CA$250m in over 16 currencies. The global footprint of Linamar means the organisation is exposed to liquidity risk, currency risk, interest rate risk, counterparty and credit risk.

Best practice and innovation

In less than just nine months the team at Linamar completed approximately 95% of their planned implementation which was made all the more complicated as a result of the aforementioned acquisition.

As Dageria Morgan, Manager of Treasury, Linamar Corporation recalls, “The team worked diligently to integrate the acquisition, improve and update the existing disparate systems operations and maintain the day-to-day activities and working capital at a firm that operates across 17 countries.”

The Linamar treasury team worked in record time to take a series of outdated and disparate treasury systems and migrate to a new consolidated, workstation platform. Linamar has a very lean team who managed this project in-house, no external consultants, apart from banking partners, were involved in this project. The team managed this process during a year of industry upheaval and at the same time managed to onboard and integrate a major acquisition in MacDon industries. Efficiency by design and a balanced approach to ensure all stakeholders were involved (part of Linamar’s “Stepping Stool” philosophy) make this project unique.

Key benefits

• Improved process efficiency.
• Increased automation.
• Number of bank accounts reduced.
• Costs reduced.
• Increased profitability.
• Cash flow forecasting and liquidity planning improved.
• Increased straight through processing.
• Operational risks reduced.
• Working capital improved.

“The team focused on the mission at hand and worked collectively and collaboratively with other stakeholders across the organisation, to meet the agreed milestones and timelines and managed to do so with a sense of humour and comradery,” explains Morgan.