Silver Lake Sumeru makes Latin American debut

The tech-focused middle market affiliate of Silver Lake Partners has purchased a minority interest in Brazilian computing company Locaweb.

Silver Lake Sumeru, the middle market affiliate of mature technology investment firm Silver Lake Partners, has made its first investment in Latin America, acquiring a minority stake in Brazilian computing company Locaweb. Financial details of the transaction were not disclosed.

Locaweb provides webhosting, email accounts, e-commerce platforms, cloud computing and other services and has benefitted from 22 percent annual growth of internet domain use in Brazil, according to data from the Center of Studies on Information and Communication Technologies.

“We’ve been evaluating Latin America as a market for several years and are very interested in participating in the growth opportunities in Latin America and Brazil specifically,” managing director of Silver Lake Sumeru Kyle Ryland told PEO. “We typically want to invest in market leaders, and Locaweb is the leader in web hosting and cloud computing in the Brazilian market.”

The company hosts approximately 23.5 percent of all web sites in Brazil.

Silver Lake Sumeru's investment comes from its inaugural fund, which closed on $1.1 billion in May 2008 after roughly 11 months in the market. The fund still has a “substantial” amount of dry powder, Ryland said, and the firm is currently pursuing additional investment opportunities.

Last month, Silver Lake Sumeru hired former Texas Instruments and Cheyenne Communications executive Yuda Doron as a senior advisor for Israel. Doron is responsible for overseeing the firm’s Israeli operations as it seeks to “identify investment opportunities and expand the firm’s relationships” in the country, according to a statement.

Also in August, Silver Lake Partners completed its second deal in China, investing $124 million for a 62 percent stake in Allyes Online Media, a Chinese digital marketing company whose clients have included Sony, Pepsi and Chrysler.

Other investments from the Silver Lake Sumeru inaugural fund include a $60 million investment in the listed electronics company Power-One last year and the $185 million acquisition of software company i2, which specialises in applications for law enforcement and intelligence, in 2008.