Spooked: How CEOs Are Handling Their Cash Differently

Accuform announced three strategic acquisitions in the past year, giving the company new markets, customer bases and manufacturing capabilities. “We’d wanted to make these deals for some time now, but didn’t have the cash,” says Johnson. “The last couple years have been very good to us, making the timing right.”

The company is also evaluating a proposal to build a new, all-concrete manufacturing facility. At present, it operates a campus of four separate buildings. “We’d like to consolidate into a single structure,” says Johnson. “We’re also in the Tampa area and got lucky with Hurricane Irma, hence our interest in a more reliable concrete structure.”

BlackLine will also shell out money when it makes sense. Last year, Tucker inked the largest acquisition in the firm’s history, acquiring Runbook, an EU-based provider of financial close and automation solutions to the SAP market, for approximately $34 million. “It was an important investment that made us both stronger on behalf of our respective customers,” she says.

“We’d wanted to make these
deals for some time now,
but didn’t have the cash. The
last couple years have
been very good to us,
making the timing right.”
—Wayne Johnson, CEO, Accuform

PROFITS PULL THE STRINGS

The bottom line when it comes to allocating funds appears to be, well, the bottom line—higher net profits. Big bets with the potential to send revenues soaring and build a CEO’s legacy will continue to make news. Still, one can argue that OPEX has become more attractive than CAPEX.

“This was the first year we didn’t have ‘sales growth’ as part of the strategic plan,” says Johnson, whose company chose to invest in a cloud-based sales order automation tool. “Even though we already run a lean company, we wanted to challenge people here to control their budgets even better. And it has resulted in nearly doubling our profits from the same period last year.”

While their coffers are full, many CEOs are willing to risk only so much of their hard-earned capital—and planning to do so conservatively. “That recession we came through was stark,” says Tucker. “Those of us that made it through don’t have short memories. Things look great right now, but we live in uncertain times. And when times are uncertain, you keep a close eye on your bank account.


THE TAKEAWAYS

*Still skittish from the Great Recession, CEOs remain cautious about spending.

*There’s a growing appetite for less capital-intensive investments in boosting operating efficiency.

*Cloud-based solutions are increasingly attracting interest—and cash.

*CEOs are still pursuing strategic acquisitions—when the timing and terms are right.

Read More: Following The Money Into The Cloud