Blackline Inc. (BL) acquires Fourq
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Accounting automation software manager BlackLine, Inc. (Nasdaq: BL) today announced that it has completed the acquisition of FourQ Systems, Inc., a leader in B2B financial management technology. With FourQ, BlackLine enhances its existing intercompany accounting automation capabilities, further strengthening its position with the Office of the Comptroller by driving the end-to-end automation of traditionally manual intercompany accounting processes and accelerating BlackLine’s long-range plan. to transform and modernize finance. and accounting (M&A).
Global trade, ever-changing mergers and acquisitions, and tax regulations create increasing headaches for global M&A teams. As a result, intercompany accounting – the management of financial transactions between separate legal entities belonging to the same group of companies – has become a big drain on the precious M&A resources of multinational companies and has been thrust into the global spotlight. The inherent complexity of intercompany financial management creates an unsustainable operating environment for organizations looking to modernize M&A operations. With the acquisition of FourQ, BlackLine can further reduce intercompany complexity and help clients execute an effective global tax strategy.
Designed by finance and accounting and tax experts, FourQ’s B2B financial management software offers automated B2B processing to help streamline its clients’ global operations. Using FourQ’s technology, these customers have increased operational productivity and efficiency through improved intercompany billing, payment and tax optimization.
“Intercompany accounting is one of the biggest distractions for finance and accounting for multinational corporations. Hard to believe, but most companies still use legacy, repetitive and manual processes to manage intercompany relationships, exposing their business to unnecessary costs, significant compliance risks and missed working capital and tax opportunities,” said BlackLine CEO Marc Huffman. “M&A must become more agile to respond to ever-changing market dynamics and changing market regulatory needs, but they are often buried in tactical transactional work and intercompany disputes. B2B challenges are nothing new, but with increasingly complex global business models and regulatory scrutiny, demand for transformation is higher than ever.”
FourQ technology complements existing BlackLine functionality by adding advanced tax capabilities and improving regulatory compliance in areas such as statutory reporting and transfer pricing. With FourQ, companies can better apply and optimize their global tax strategies. As a result, companies can generate significant value by ensuring compliance with tax laws, including new e-invoicing mandates, optimizing effective tax rates and reducing exposure to currency risk to improve the fund of turnover and drive profitability.
“FourQ and BlackLine share a vision to help optimize customers’ global operations for increased profitability and efficiency while allowing M&A teams to focus on the strategic aspects of their business,” said Varun Tejpal, co-founder and CEO of FourQ who will serve as Managing Director. , Intercompany at BlackLine in the future. “At the same time, FourQ fills a need in the Office of the Comptroller that is highly complementary to BlackLine’s comprehensive financial operations management platform. I look forward to reducing the headaches caused by messy cross-company accounting processes. and further solidify BlackLine’s market-leading position as we join forces to help customers continue to advance their business-to-business journeys.”
In a recent report, Ventana Research asserts that corporations with even a modestly complex legal entity structure that operate in more than a handful of tax jurisdictions and with ERP systems from multiple vendors are likely to reap measurable benefits from adopting intercompany financial management. . The report goes on to say that this enables them to solve the problems created by an uncoordinated approach to business-to-business transactions based on inconsistent and incomplete data. “By moving to a modern intercompany accounting environment and eliminating distractions, companies can unlock M&A’s ability to focus on what matters most to the business,” Huffman added.
BlackLine completed the acquisition of FourQ on January 26, 2022. Pursuant to the terms and conditions of the transaction, BlackLine acquired FourQ for $165 million payable at closing, plus an earnout of up to $75 million over the next three years subject to certain financial performance milestones. BlackLine funded the transaction with existing cash. Additional details regarding the acquisition will be provided during BlackLine’s fourth quarter and year-end earnings conference call on Thursday, February 10, 2022.