The announcement of a merger always comes with its own particular sense of excitement and anticipation. That was true when Cerner Corporation, a leader in healthcare information technology, announced that it would acquire Siemens Health Services for $1.3bn. This sense of anticipation was most keenly felt by the Cerner treasury team who, between three of them, were placed in charge of merging an existing treasury function, with the carve-out of Siemens Health Services from its parent, Siemens AG.
A RACE AGAINST TIME
The challenge set out by the merger was to integrate the banking arrangements for the two businesses, which would mean the treasury team needed to tender out the business, select a partner and open new accounts across multiple jurisdictions, all whilst coping with a multitude of differing regulatory requirements. The acquisition closed on February 2, 2015, and by late January, the team was expected to have all the new accounts in place, connected to Bank of America Merrill Lynch’s (BofAML) online banking platform (CashPro® Online), and fully integrated with Cerner’s Enterprise Resource Planning (ERP) system — PeopleSoft via SWIFT. Furthermore BofAML, as the incumbent bank, was already hosting a euro cash pool via its Global Liquidity Platform (GLP) and was tasked with adding the newly acquired Cerner entities to this structure by the agreed deadline.
Issuing the RFP in October 2014, Cerner quickly decided that it would retain BofAML as its primary cash management bank for EMEA and India. This was in part due to a long-standing and fruitful relationship established from years of building trust by delivering on promises. It was also due to the commitment made by Cerner’s Cash Management team at BofAML to deliver a fully integrated solution on time.
Time was now ticking and in less than four months Cerner needed to be up and running. Working closely together, the Cerner and BofAML teams developed and laid out a full scope of work and implementation framework. The solution contained a number of potential challenges including the creation of new entities, which required capital accounts in five countries. These needed to be operational within four to six weeks of bank selection to meet legal requirements.
LEVERAGING LEADING-EDGE TECHNOLOGY
The BofAML technical team sprang into action, beginning the process of executing on the framework. The technical lead was able to identify points in the implementation process that could be simplified, such as the linking of accounts to existing structures, with Cerner able to benefit from BofAML’s single BIC technology, which simplified SWIFT Connectivity.
The original deadline for opening the operating accounts was accelerated by two weeks, so that Cerner’s clients could be informed of the new remittance information. Finally, and if this wasn’t enough, Cerner and BofAML had to implement comprehensive foreign exchange services through the use of the CashPro® Connect FX channel and, in addition, a global T&E card program, integrated with Cerner’s ERP system.
SUCCESS THROUGH COLLABORATION
The four months passed quickly, and it is testament to the dedication of both teams that not a single deadline was missed. The Cerner treasury team managed a successful RFP process, mandated BofAML for the expanded business and opened 16 accounts in 15 different jurisdictions, all fully integrated to enable straight-through processing. On completion day, the purchase amount was paid from within the new banking structure. The historic relationship with BofAML made the integration of the new acquisition smooth from a timing, cost and KYC perspective.
The success of this project hinged on the close collaboration between treasury and bank and the willingness of both to be open and flexible throughout the process. This solution demonstrates the rewards to be gained through a collaborative relationship between a treasury team and its chosen banking provider.
Leonard Nick, the assistant treasurer, described how Cerner was able to take advantage of BofAML’s investment in technology and information reporting through CashPro Connect: “BofAML’s technology was successfully deployed and will save us countless man-hours. It will also help us to reconcile thousands of payments automatically.”
Case studies are for illustrative purposes only and intended to demonstrate the capabilities of Bank of America Merrill Lynch. You should not consider these case studies as an endorsement of Bank of America Merrill Lynch. Case studies do not necessarily represent the experiences of other clients, nor do they indicate future performance. Results may vary.
- Amid an acquisition, Cerner needed to unite the banking and treasury solutions for two businesses within four months
- Success hinged on close collaboration between Cerner’s treasury team and BofAML
- Utilizing the latest technology, Cerner achieved successful integration across multiple jurisdictions before the acquisition closed