ICE Chief: A ‘Chess Master’ With Sharp Elbows
December 20, 2012, 6:08 p.m. ET .
By JACOB BUNGE
The takeover deal for NYSE Euronext could put a former race-car driver behind the wheel of the Big Board.
The play by Atlanta-based IntercontinentalExchange Inc., a commodities-market operator that is far less known than the New York Stock Exchange, was masterminded by ICE founder and Chief Executive Jeffrey Sprecher, an executive known for his down-to-earth Midwestern demeanor and sharp elbows when it comes to business and deal making.
“Jeff is a chess master,” said Sunil Hirani, who sold his credit-derivatives firm to ICE in 2008 and worked for Mr. Sprecher until 2010. “You’ve got to think about the second and third step that he’s planning.”
Mr. Sprecher, 57 years old, is recognized as the builder of the exchange sector’s fastest-expanding company over the past decade. A flood of investment into resources during that time has boosted ICE’s revenue at a compounded annual growth rate of 43%, according to Sandler O’Neill + Partners.
Investors have backed Mr. Sprecher’s moves into markets like crude oil, agricultural commodities and trade-processing services, at times arriving just ahead of an upswing in activity, favorable regulation or well-timed crisis.
Mr. Sprecher’s push into power markets came just ahead of the 2001 collapse of energy-trading company Enron Corp., making ICE the destination for traders.
“Jeff had some extremely good luck early on,” said Michael Cosgrove, an energy-market executive who first met Mr. Sprecher in 1999. “But his return on luck has been phenomenal.”
People who have worked with and against Mr. Sprecher over the years describe him as a nonlinear thinker transfixed by mechanical systems, who pushes himself to outmaneuver rivals.
In the 1980s, Mr. Sprecher drove race cars before shifting careers to build power plants in California. In 1997, he bought the Continental Power Exchange in a bid to unify fragmented electricity trading and overhauled the market by forming IntercontinentalExchange in 2000 as he embarked on a spree of deals for commodity markets in London, New York and Canada. But Mr. Sprecher, an engineer by training, has earned a reputation as a corporate marriage-wrecker.
“He’s the most proven in the [exchange] space in terms of driving growth and attacking new entrepreneurial opportunities,” said Chris Allen, an analyst with Evercore.
In 2007, already an upstart futures-market operator, Mr. Sprecher grabbed the spotlight with a surprise bid for the Chicago Board of Trade, offering to buy the agricultural futures exchange for more than its agreed merger partner, the Chicago Mercantile Exchange, had tendered. After four months, ICE lost the fight but not after forcing CME to lift its offer.
After German exchange operator Deutsche Börse AG announced a planned deal for NYSE in 2011, Mr. Sprecher thought the Germans were getting too sweet of a deal. In Nasdaq OMX Group Inc. CEO Robert Greifeld he found a partner who wanted to try to break up the merger.
That didn’t work either. The Justice Department vowed to block the Nasdaq-ICE proposal, which NYSE repeatedly rejected, over antitrust concerns related to the stock-listing business. Mr. Sprecher has said that if nothing else, he elevated ICE’s profile and forced rivals to take him and his company seriously.