While she was planning the new headquarters for financial technology service provider WEX Inc., Melissa Smith took a tour of media giant Bloomberg's New York City base of operations. Smith, WEX's president and CEO, noticed an aquarium that draws Bloomberg employees to a central location.
The inspiration was eventually incorporated into the new WEX headquarters that opened in March on the Portland waterfront, and has served a similar role for the tightly knit group of WEX associates who often greet each other by name as they navigate their workday.
With the new headquarters, the Maine native hopes to create a hub of cooperation among nearly 400 associates.
"I like that there's a hub feeling when you go into Bloomberg's building, where everyone connects in one spot," she said. "I wanted to create that hub somewhere in our building."
Automotive Fleet visited Smith to talk about her busy 2019, during which the company has also been doing some shopping. Earlier this year, WEX acquired the fleet card portfolios of Shell Oil Co. and Chevron Corp., as well as EG Group's Netherlands-based fuel card business.
As a dyed-in-the-wool Mainer, Smith has deep roots in the state. After graduating from the University of Maine and an early-career stint at Ernst & Young, Smith joined WEX and worked her way up through finance with roles as vice president and controller, senior vice president of finance, CFO, and executive vice president of finance and operations.
In October 2011, Smith was named president of the Americas and in January 2014, she became president and CEO.
We spoke with Smith in her top-floor office that overlooks the waterfront like many other areas in the building that have incorporated plenty of WEX red (Pantone 186) into furniture and wall hangings.
Automotive Fleet: In March, you opened a long-awaited headquarters. Tell us about some of the cool features?
Smith: I love the space, because I feel like it's us. I wanted it to reflect the personality of the company culturally and be a good fit for employees. A lot of light comes in, and there's a lot of space for people to work collaboratively. I like the fact that it doesn't look corporate, and that there's a feeling of unexpectedness. Even the materials were intentionally chosen to be unlike what you would see in a corporate environment.
AF: What does it mean to you to remain headquartered in Maine?
Smith: We have more than 30 offices around the globe, but there has always been something special about Maine. It's a place where people enjoy living and working. It is very relationship based. There's an element of coming from Maine where you're expected to show up and be part of the community. Our physical presence has really been all about staying true to those roots.
AF: Is your fleet business all here in the new building?
Smith: Parts of it. Some of the private label sales groups are here. The product and tech, the interface of those two are here. And then there are big pieces in South Portland as well.
AF: You've been in M&A mode this year. What spurred that, and how are you integrating it all?
Smith: Chevron and Shell, those were regular bids. They went into the marketplace and asked for somebody to pick up their commercial fuel payments business. We went through a competitive process and won both. The Chevron portfolio was a little bit unusual in that we had to buy the portfolio, but that was part of a normal, organic process. Go Fuel Card, the fuel card business we bought in Europe, was a carve-out of the commercial fuel programs for EG Group. We must go through works council approval before we go through the close, but that should happen soon.
AF: The timing was interesting that you're working on all three at once.
Smith: They ended up getting stacked together. It took us time to go through the migration for Chevron. And then Shell went into the marketplace and wanted a conversion very quickly. So, the two ended up coming together, which meant that we had to think differently about how we bring on new business. There's been a huge amount of work that's happened in the background to get systems ready for the volume increases. It's about 7% of the existing volume in our fleet business that was coming on for those two portfolios in terms of gallons.
AF: What was the impetus?
Smith: The first conversation that we have is how we are going to continue to grow the business. We start with organic growth. That's where our core strength is. It is why people come to us to grow their portfolios. The second thing they care about is that there's an inherent quality around brand. They care about having a partner that they can test things with and that will try things in the marketplace. You must have an element of trust before you lock in for that long of a time … For us, we try to grow revenue 10% to 15% over time.
AF: Could we see some more M&A activity in the next year or so? Is this something you're still actively pursuing?
Smith: We will always be in the market. This past year, we've been particularly active. In this market, the multiples are high. So, we've had to go through more assets to get to the ones that we've executed on.
AF: What does a deal have to have? Are there certain key elements for you?
Smith: Well, it must hit financial criteria for us. We start by saying, "These are the things that we want strategically." International expansion is something that we continue to look at. If it helps accelerate our existing product roadmap, then that's interesting to us. We also keep trying to diversify our exposure to fuel prices, so we tend to be more interested in assets that help offset that.
AF: This is probably a good segue into the fleet fuel market. Everyone's always wondering which direction fuel costs will go.
Smith: From a customer perspective, they talk more about efficiency of their vehicles and predictability of their budget. We give them tools to manage their individual costs, and we show them how they benchmark against their peers. Regardless of what environment I'm in, am I doing the best I can to create efficiency?
AF: With the rise in mobile and electronic payments, do you think we're moving away from the traditional fleet fuel card?
Smith: We're now adjudicating credit. A lot of our customers and our prospects are coming through our online site because they see information they like. They could fill out an application, download the app, and not even have to wait for a card to go and use it. They would have an even more secure product at the end of the day. The possibilities of what we can do, as technology changes, are exciting.
AF: OK, thank you for your time.
Smith: Thank you.