Ipreo Pulls its Assets Together
Ipreo, the new company created by the merger of New York-based new issues dealing systems i-Deal, its UK equivalent MarketPipe and UK fundamental data provider Hemscott, has put itself on a 100-day plan. Rather than a diet, this plan is the first step in the integration of the companies and their products. Former i-Deal chief executive Scott Ganeles, now CEO of Ipreo, is the man charged with pulling the companies together and taking them forward.
IMD: What has taken place at Ipreo since the merger?
Ganeles:
For the first three weeks, it's been an education on all the businesses and the people—how they work, cultures, other respective organizations—and we have created a 100-day action plan.IMD:
What does that involve?Ganeles:
We wanted to put together across all the business lines key objectives that we would hold the entire firm accountable for within the first 100 days that wouldn't be too grandiose... To use a sports analogy, we're going to hit some singles, we're going to get on base and build some momentum in the marketplace—do some simple things that are valuable to our clients that demonstrate to them that these companies coming together is more than just one plus one plus one makes three... This is a pretty complex animal when you put it all together, and if you try to take everything on at the same time, you'll probably fail.IMD:
Can you give examples of what the first 100-day plan involves for specific business lines?Ganeles:
In the context of the i-Deal new issuance system and the MarketPipe new issuance system, an objective would be that those two systems would interoperate within the first 100 days. So both sets of users will be able to keep using the systems that they bought, and as a result of this merger, will have connectivity to six or seven other broker-dealers immediately. In the case of the Bigdough asset, the objective is to immediately be able to move data from your Bigdough CRM system into our i-Planner debt management product and into your book-building. Ultimately, what we're going to try to do is build one complete workflow that will have a single sign-on and to be able to share data.IMD:
What was the strategy behind the merger?Ganeles:
i-Deal has traditionally been Web-based transaction software that allows for e-issuance using best-of-breed technologies, while Hemscott was a financial information company. The goal going forward for everybody is to have integrated decision tools in the workflow. Why should I have my decision tools in one place, then have to go over to something else? What everybody's trying to do is to merge the two. It sounds simple, but hasn't always been done effectively because they're either technology companies trying to become data companies, or they're data companies trying to become technology companies.IMD:
What's the value-add for clients?Ganeles:
The strategy is to provide one place where you can analyze or structure a deal... and integrate it in the same place—so to be in a CRM system looking at a prospect that you might want to take an order from, and in that same sales worksheet have the actual order entry system to put that order in. We want to marry third-party content with primary source content and our clients' content.IMD:
Will the individual i-Deal, Hemscott and Bigdough brands remain?Ganeles:
We will preserve brands where it make sense. They might not be brand products, they might be "Bigdough Inside," but within the first 100 days this will be one company with one voice.IMD:
You mentioned data companies wanting to become technology companies and vice-versa, and the balance between that. How do you balance priorities between transaction and content?Ganeles:
The neat part about how we're balanced—at least from a revenue point of view—is that we're 50-50 right now. Going forward, I would imagine that it's always going to be 50-50 because whenever we create a piece of software, we do that in the context of our ability to populate it with decision tools. We're not going to create software for software's sake, and we're probably not going to create content for content's sake. If we create content, it's going to be differentiating and immediately usable within the software.IMD:
Will the profile of your clients change now that Ipreo combines different business lines?Ganeles:
i-Deal will now have more products to sell to the larger global banks as a result of the assets acquired in the merger. We will also now be able to go further downstream and have a full suite of offerings. i-Deal has traditionally been primary issuance systems. But the smaller banks do a little primary, they do a little secondary—it's not as separated as it is in the larger banks. Now with Bigdough, you have a CRM system for the secondary market integrated with a system for the primary market, integrated with an event planner, integrated with an i-Conference system—that's a nice turnkey package for the regional players, and a new market that we can effectively go after.IMD:
What will be the lineup of products? Will you keep them as they are, or cross-fertilize or integrate them, or bring new ones to market by combining assets from different areas?Ganeles:
We have just launched an initiative within Bigdough to create a global fixed-income database... so that if someone buys this, this and this, that whole relationship is within a relational database. I want to be able to look at someone and say "they do derivatives, they do stocks, different types of stock and structured products.The other big initiative is in structured products, which is a major area of growth for us on the transaction side. Now, if I'm consistent with what I said before, we'd love to create content sets that support that structured products transaction... Everything we do has to be cross asset-class. So a CRM system that only supports equities today needs to be rebuilt to support cross asset-class. A contacts database that only has a one-to-one relationship needs to be rebuilt to provide a cross asset-class look at an individual, at a company's structure... And we want to take that same philosophy to the finance officer and provide a cross asset-class view across their whole corporate structure and all issuance products.
IMD:
What stage is the company at now in terms of integrating staff and offices?Ganeles:
We fully integrated our London office on Jan. 15. MarketPipe will be joining us soon, but the entire Hemscott and i-Deal staff in London is now under one roof. Hemscott had planned on moving anyway, and with the merger, we expanded the deal, so we took two floors instead of one and co-ordinated the move to happen all at one time. In the US, we have this office in New York, and the Bigdough team will probably stay in Bethesda. Our goal is that we will be fully integrated by mid-year.IMD:
When the merger was announced at the end of last year, [Ipreo chairman] Ros Wilton said the merger would give you more opportunities to cross-sell—is that by integrating products or taking products from different areas of the business to a market that they might not have targeted before?Ganeles:
A combination of both.... By integrating a content set of theirs into a software product of ours, you effectively create a new value proposition which would now appeal to a group of people who weren't interested before. There's cross-selling which is taking the Hemscott products that have traditionally been focused on the small to mid-size regional banks and bringing them to the global banks, integrated with our products into the workflow. Or you can take our execution software that as a standalone may not be appealing to a regional bank that only does three equity issuances per year, but when integrated with a CRM system and with content makes perfect sense, so we can go sell it to their core client base.IMD:
When you came together, i-Deal and MarketPipe were private companies, and Hemscott was public and had to go private prior to merging.... Is the intention to stay private, or now that you're a bigger company, is the intention to take Ipreo to market and go public further down the line?Ganeles:
For the near- to medium-term, we're planning on being a private company. But with that would be an expectation that we will do additional acquisitions if they make sense, and build by partners.IMD:
In what particular areas? Have you identified any other areas that you'd like to take the company into?Ganeles:
Any acquisition we would make would be within our competencies, so within the issuer services space. ... There are a number of small companies that would be logical add-ons that have a data set that naturally should be integrated into ours, or a neat piece of software that handles one aspect of the workflow very well that could be easily integrated into our workflow. That's what we would look at.CEO Confidential Name: Scott C. GanelesDate of Birth: Jan. 14, 1964Hometown: Peekskill, NYEducation: Brown University (Political Sciences)Current Home: Armonk, NYFamily: Married with three sons and a daughterQ. What book are you currently reading? A. Kiss, Bow, or Shake Hands by Terri Morrison, Wayne A. Conaway and George A. Borden Q. What CD is in your stereo right now? A. U2 and Queen's We Are the Champions before the kids' games Q. What was the last movie you watched? A. The Good Shepherd Q. Which sports team do you root for? A. The New York Yankees and Manchester United Q. What did you do for your Christmas vacation? A. We went to Florida where my family has a home Q. What's your favorite city or place to visit? A. San Francisco because you can have three distinct experiences within three hours—Napa, the coast and mountains in one place Q. What newspapers or magazines do you read? A. The Wall Street Journal, Financial Times, and The New York Post Q. What was your first paying job and how old were you? A. My parents owned a day camp and I ran the snack bar where I learned how to be a monopoly Q. If you could have dinner with any person, real or fictional, dead or alive, who would it be? A. Sandy Koufax, a famous baseball player for the Dodgers who refused to pitch in the World Series on Yom Kippur Q. How much sleep do you get each night? A. Not enough. If I get six hours, it's a good night |
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