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Liquidity Management

Leading Media and Internet Company

Multi-entity, multi-currency notional pool creates long-term and stable liquidity structure


About

IAC/Interactive (NASDAQ: IAC) is a leading media and Internet company comprised of widely known consumer brands such as Match, Tinder, PlentyOfFish and OkCupid, which are part of Match Group's online dating portfolio, HomeAdvisor and Angie's List, operated by ANGI Homeservices, as well as Vimeo, Dotdash, Dictionary.com, The Daily Beast and Investopedia.
 

The Challenge

In preparation for a large and complex transaction, wherein IAC combined its HomeAdvisor business with Angie’s List by way of a merger-exchange to create a new publicly traded company (ANGI Homeservices), the company established several critical cash management objectives for one of its key business units in EMEA. Prior to the transaction, it was necessary to repay/refinance certain cross-segment indebtedness between HomeAdvisor and IAC subsidiaries, as well as minimize cash balances in order to reduce leakage to the parent company’s shareholders. In addition, the treasury team had to find a way to manage liquidity more efficiently without the need for frequent distributions, contributions and/or intercompany loans, while reducing foreign exchange (FX) exposure and cost. To accomplish its goals, IAC needed to consolidate disparate banking relationships into a single banking provider to gain greater visibility and control.

The overall mission was to increase treasury efficiency and improve the ability to fund growing operations and expansion plans within EMEA. All of this had to be accomplished within an exceedingly short timeframe, increasing the challenge for the team.
 

The J.P. Morgan Solution

  • To meet critical business objectives, IAC worked with banking partner J.P. Morgan to implement a unique multi-entity, multi-currency notional pooling structure in Luxembourg. The pool was linked to in-country operating accounts in the UK, France, and the Netherlands on a single-bank platform
  • Completed in less than three months, this new structure functions across eight different entities and management teams, and 16 accounts
  • This ambitious initiative delivers real-time visibility into cash positions, as well as increased control and critically important cost efficiencies

The Impact

  • Since implementing the multi-entity, multi-currency notional pool, the company has minimized the amount of cash sent offshore and maximized the value of all operating cash
  • IAC has eliminated the need for day-to-day management of fragmented currency balances and achieved efficient cash management via a single currency without the need to create FX
  • The team now has real-time visibility and control of all European cash through a single bank platform
  • Hosting the cash pool with J.P. Morgan Luxembourg enabled the company to establish a long-term and stable liquidity structure within the European Union, which was critically important in light of the evolving market situation

 

J.P. Morgan is the marketing name for the Treasury Services business of JPMorgan Chase Bank, N.A. and its affiliates worldwide.

©2018 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC.

The products and services described in this document are offered by JPMorgan Chase Bank, N.A. or its affiliates subject to applicable laws and regulations and service terms. Not all products and services are available in all locations. Eligibility for particular products and services will be determined by JPMorgan Chase Bank, N.A. or its affiliates. You should examine the specific restrictions and limitations of local law that may be applicable to your company when using the products and service described in this material.

J.P. Morgan AG is authorised and supervised by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin).

J.P. Morgan Bank Luxembourg S.A. European Bank and Business Centre, 6 route de Treves, L-2633, Senningerberg, Luxembourg R.C.S Luxembourg B10.958 - SWIFT BIC CHASLULX - VAT Number 19732200242
J.P. Morgan Bank Luxembourg S.A. is regulated by the Commission de Surveillance du Secteur Financier (CSSF) and is jointly supervised by the European Central Bank (ECB) and the CSSF. J.P. Morgan Bank Luxembourg S.A. is authorized as a credit institution in accordance with the Law of 5th April 1993

JPMorgan Chase Bank N.A. at its London Branch is authorised by the Office of the Comptroller of the Currency in the jurisdiction of the U.S.A. Authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request (Firm Reference Number: 124491).