Life Sciences Blog

Strengthen Your Cash Position

Strengthen Your Cash Position

6/29/2017

Insights Following the Q1 Life Science CFO Strategic Governance Forum

An analysis of industry mergers & acquisitions during the recent Q1 Life Science CFO Strategic Governance Forum showed an almost 36% increase in number of transactions between 2015 and 2016. A deeper dive revealed a number of factors driving M&A activity:

 
  • Payer cost pressures
  • Diminishing returns on R&D expenses
  • Divestiture and asset swaps
  • Patent cliff
  • Political instability
  • Generics and biosimilars
  • Convergence of tech and life sciences
 

With the flurry of M&A activity in the life science industry, financial position is a critical consideration. Whether your company is looking to be acquired, seeking to remain independent, or hunting for prospective organizations to purchase, a strong cash position is ideal in this market.
 
One strategy to improve cash position is employing a sale and leaseback transaction: you sell your capital equipment to a lessor, and the lessor reimburses your company 100% of the original purchase price of your equipment – all without any interruption to its use. Related software, services, and build-out expenses are also eligible for reimbursement.
 
By strengthening your cash position, you can improve liquidity rates, maintain debt ratings, and spread the cost of the equipment over the life of the asset. Learn more about First American’s cash reimbursement program.

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