Romulo de Mello Dias | Executive Profile | ATLANTA TREND
The Team Leader
By Robert Green
The Atlanta business community stood up and took notice when Brazilian based payment acquirer Cielo announced the acquisition of Merchant e-Solutions for $670 million on July 3rd. Not only because Atlanta resident Kevin Gallagher has been serving as the General Manager of Merchant e-Solutions but also because it is rare for a payments company to be acquired by an acquirer outside of the US. The purchase of Merchant e-Solutions by Cielo, however noteworthy, is just one of the successful events that have occurred since Romulo de Mello Dias became the CEO of Brazilian based Cielo in May of 2008.
Romulo de Mello Dias was born in Rio de Janeiro on September 27, 1961 and was the oldest of three children. He has a brother and sister but was also part of a large extended family – his father had eleven brothers – so there was always a lot of family around. He enjoyed swimming and soccer as a boy but liked studying more. “I liked soccer a lot but I really wasn’t very good. I am still an avid fan,” he says.
Dias began working at the age of 18 for Banco de Brasil in a branch office where he started by opening accounts. In a short time he was also working on “share custody.” Within six months he moved to Cacex, a department of Banco de Brasil that was responsible for controlling of imports and exports. In the world of NAFTA, this department no longer exists. Dias continued his education obtaining a degree in Economics from Universidade Federal Fluminense, an MBA, and postgraduate work in Executive Management Development from IBMEC, a private university in Brazil widely regarded as the most prestigious institution in Latin America for the fields of business and economics.
His work career after completing his studies saw him become an Executive Director at Citibank, Executive Officer of Bradesco BBI (one of the largest banking and financial services companies in Brazil) and Executive Officer of Bradespar, the extremely large Brazilian holding company which controls Vale, the second largest mining company in the world. “I have worked in many different environments,” says Dias, “and have had the benefit of understanding different cultures and different perspectives. This has been invaluable in helping me to develop business skills, improving my executive role in the future experiences of life.” Dias believes that the true executive leader employs his heart as well as his head and that there is nothing more important than being transparent. “Good news or bad news, I always let the team know where we are. A fair and demanding leader will succeed but an unfair and demanding leader will fail,” says Dias.
Initial Public Offering
When Dias became the CEO of Cielo in 2008 the company was supposed to do its IPO right away. The worldwide financial meltdown that started that summer meant postponing the offering to a later time and Dias made good use of the interval. “Our company had four private owners – Visa, Santander, Banco de Brasil and Bradesco” said Dias, “and I had to get them to agree on valuation. I also wanted to spend time pointing the company more toward meritocracy and also cut costs and expenses. The delay in going public allowed time to work on these things.” Dias believes these moves better prepared the company for future competition and not just for the IPO.
The company finally did go public in June of 2009. With the financial collapse so fresh in people’s minds all the advisors that Dias spoke to – attorneys, analysts and investment bankers – said that such a move entailed great risk. “We had a great company,” said Dias, “but they all said that in that financial climate that there was no ‘visibility’ to success.” But Dias thought the time was right and, despite the markets still being somewhat shaky, went ahead with the IPO. Their six book runners for the sale were JP Morgan, UBS, Goldman Sachs, Santander, Bradesco BBI and Banco do Brasil Investments. The results exceeded all expectations. The company raised $4.4 billion in the largest public offering in the history of Brazil. They sold 41% of the issued shares at the top of their asking price. 100% of proceeds went to the four sellers.
The unique name means “sky,” and “we also wanted to convey that we are the biggest company in Latin America and one of the best –the sky is the limit,” says Dias.
Acquisition of Merchant e-Solutions
Cielo’s acquisition of Merchant e-Solutions came after two years of research to find the best “next generation” of merchant acquiring technology. “We got the technology that we were after and also bought a good business,” says Dias. “57% of their business is e-commerce and they have an overall profit margin of 40%.” Merchant e-Solutions had $124 million in revenue over the last 12 months ending in May of this year. They service approximately 250 banks and 130,000 merchants and most importantly, says Dias, “their state of the art products allow both banks and merchants to easily access the information that they want to see.”
But the purchase of Merchant e-Solutions does not mean that Cielo has fundamentally changed its strategy to a more global perspective. “We intend for the US business to grow organically while we continue to concentrate on Brazil,” said Dias. “Payments business penetration in Brazil today is only 27%, still much lower than other countries. We have a lot of opportunity within our own borders,” he said.
As with other payments companies, Cielo is working on e-payments, mobile technology and fraud. In August of 2010, Cielo acquired M4U for mobile payments. In September of 2010 they entered into a joint venture with Oi, one of the largest mobile companies in Brazil, to create Paggo, also for mobile payments. In May of 2011 they acquired 100% of Braspag, the leading gateway company in Latin America. Cielo has also formed a strategic alliance with CyberSource, a Visa company, to offer a better anti-fraud solution to its e-commerce clients.
Cielo ended 2011 with revenue of $2.66 billion and net income of $1 billion. They have only 1,464 employees in their tight knit team. “I tell the team that our core values have gotten us this far,” says Dias, “and they will see us well into the future. Our core values were created by us – not the HR department - and are part of who we are.” Cielo’s seven core values are:
Employees with attitude, team spirit and passion in all they do
Surpassing customer expectations
Ethics in all relationships
Innovation oriented by results
Sustainability and corporate responsibility
Constantly busy, Dias makes it a point to work out five or six times a week for the energy boost but is also an extensive reader in his spare time. He enjoys meeting friends and family at restaurants and going to the movies.
“I am happy where I am,” says Dias “part of a team. No one can do it alone. My mother always said to ‘think smart and work hard’ and that is what I try to do every day.”
Atlanta Trend wishes to thank Romulo de Mello Dias for taking the time to speak to us about his life and company, Cielo.
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