Photo of Dino Albuquerque, Bank of America Merrill Lynch, Sally Poon and Tim Rice, Jacobs Engineering.

Jacobs is a great example of how a lean, efficient treasury team can leverage a close relationship with its banking provider to manage cash across widely spaced companies and regions. This strong relationship has positioned it well to take on new challenges such as the integration of the CH2M businesses.

This relationship facilitates integration of new acquisition for lean team

The challenge

Jacobs is a complex business from a treasury perspective; this complexity was compounded when the company took on its biggest challenge yet, with the acquisition of another US engineering giant, CH2M, in a US$3.27bn deal.

The treasury function needed to manage such complexity and real-time oversight of the company’s cash position and the ability to respond quickly to events across the Asia-Pacific region.

The solution

Since 2015, Jacobs has worked with Bank of America Merrill Lynch (BofAML) as its primary banking partner for the region – the result of an exercise which reduced the number of bank accounts from 214 to just 80.

This programme is still delivering today 99% straight through processing, lower transaction costs, more accurate cash flow forecasting and more effective treasury decision-making, through close co-operation between treasury and the bank.

Managing this relationship is therefore essential to the success of the treasury function, and is a primary focus for the team, even more so as the significant task of integrating CH2M’s businesses into the treasury function starts in earnest.

The treasury team itself is quite small and relies on the finance function in each country to carry out much of the day-to-day treasury work. While most of those day-to-day transactions in regional offices happen within BofAML’s CashPro portal, the personal relationship between the regional treasury team and the bank’s relationship managers has been crucial on several occasions.

Nikhil Joshi, International Treasury Manager highlights one example: “A credit facility was being opened in one Asian country, but an essential key document, required for the facility, was still being negotiated. The deal could have lapsed, but a conversation between regional treasury and the bank’s relationship management team in Australia allowed them to intervene and ensure that one late document didn’t derail the whole agreement.”

This relationship is nurtured through the regular catch-up calls between treasury and the bank, with closer and more frequent contact during periods of change – such as during the current integration of CH2M or during the recent bank account rationalisation project, when the team used a ‘traffic light’ system to track progress in different areas of the implementation and react quickly, with the bank, if things were falling behind schedule.

Best practice and innovation

Jacobs is a great example of how a lean, efficient treasury team can leverage a close relationship with its banking provider to manage cash across widely spaced companies and regions.

The regular contact between treasury and relationship managers at the bank, coupled with the effective use and integration with BofAML’s technology allows Jacobs treasury to operate very cost-effectively while still having full oversight of corporate cash and being able to respond quickly to emergencies.

Key benefits

• Company can manage treasury with a lean team.
• In-country relationship managers on hand.
• Bank account rationalisation programme used as template for cooperation on CH2M integration project.

This serves as an example for others on how to make maximum use of the ‘added-value’ that a strong relationship with a global bank can provide.

Having first streamlined the number of bank accounts it required, Jacobs went on to build a strong model for co-operation with BofAML – one which has positioned it well to take on new challenges such as the integration of the CH2M businesses.