Former ICE CFO Looks Back on Dozens of Deals Made During His Tenure
May 20 2021 - 9:18AM
Dow Jones News
By Nina Trentmann
Scott Hill helped lead dozens of acquisitions during his more
than 14 years as finance chief of Intercontinental Exchange Inc. as
the marketplace operator spent over $30 billion on expanding its
portfolio.
Companies acquired by ICE during under his tenure include the
New York Stock Exchange in 2012, market-data firm Interactive Data
Corp. in 2015 and mortgage-processing firm Ellie Mae Inc. last
year.
Mr. Hill, who retired last week, talked to CFO Journal about the
changing role of the chief financial officer, how to integrate an
acquisition and the impact of the coronavirus pandemic on the
mortgage market. Edited excerpts follow.
WSJ: What has changed since you became CFO in May 2007?
Mr. Hill: I really don't feel like I've been the CFO of the same
company for 14 years. I've been the CFO of probably four or five
distinctly different organizations. We started out in trading,
moved into clearing futures and options, into cash equities,
branching out into the data business as we moved into fixed income,
and then really leaning on our [qualifications and capabilities as
a technology company] as we moved into the U.S. mortgage space.
What used to be 300 people are now close to 9,000 people; $150
million in revenue is now over $7 billion in revenue.
WSJ: CFOs at public companies these days manage more than just
the numbers.
Mr. Hill: Any...financial person can make the numbers work and
make the model tell you the output you want. But you would never
walk into the boardroom with a deal if you don't understand the
strategy that leads to the numbers. I wouldn't have been
comfortable saying we should spend $8 billion buying the New York
Stock Exchange if I didn't understand what the strategy was and how
we were going to integrate the business.
WSJ: How do you successfully integrate a business?
Mr. Hill: Prior to this job, I spent 16 years at [ International
Business Machines Corp.] and saw a lot of mergers and
acquisitions...Some weren't integrated enough. Sometimes, it was
almost bearhug to death. I think the most important element is
we've gone into every deal with a very crisp integration plan. It
doesn't matter how good your strategy is, it doesn't matter what
the numbers tell you, if you can't execute the integration.
WSJ: Your bid to acquire the Chicago Board of Trade, a futures
and options exchange, failed. Instead, CME Group Inc. merged with
CBOT in 2007. What were the lessons you learned?
Mr. Hill: [It was] a failure in the sense that we didn't win the
deal. We learned a lot in terms of how deals get made and the way
how public companies come together. And so if you forward to the
next deals we did, we were able to look back and...approach it a
little bit differently, coming over the top of a deal versus
[being] the first person to make the offer.
WSJ: What do you mean by "coming over the top"?
Mr. Hill: CBOT was our first public deal and it was hostile. We
learned that with public deals, you have to control the message and
we learned with a hostile bid, you have to be incredibly crisp in
publicly positioning why your deal is superior.
WSJ: ICE recently spent $11 billion on Ellie Mae. What was the
consideration for the deal?
Mr. Hill: The tipping point for the U.S. mortgage space was
[Covid-19]. What was happening was that people were in their cars,
handing documents through windows, and trying to work through the
stack of papers. And when that work was finally done, it was
equally hard to get to the county office and get that mortgage
filed because nobody was in the county office because of Covid. It
just screams for automation.
Write to Nina Trentmann at Nina.Trentmann@wsj.com
(END) Dow Jones Newswires
May 20, 2021 09:03 ET (13:03 GMT)
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