Sumeru inks $185m investigation tech deal

Silver Lake’s middle market investment arm has agreed its second deal this month, its third ever, as it raises a $1bn debut fund.

Silver Lake Sumeru has agreed its second acquisition of the month with the $185 million (€118 million) purchase of i2, a unit of decision-making technology and information company ChoicePoint.

The company provides technology solutions for investigations to law enforcement, intelligence and government agencies. Its products aim to automate investigative analysis in order to increase case capacity and effectiveness. ChoicePoint had discontinued the operations of i2 in the fourth quarter of 2007 as a strategic move to divest itself of business lines outside the company’s core focus of managing economic risk.

Sumeru, the middle market investment group of tech-focussed private equity firm Silver Lake, intends to keep i2’s primary bases of operation in Cambridge, England and McLean, Virginia as well as current management and employees. Following the acquisition, i2 will become a standalone company retaining the same name. Sumeru is “committed to developing and further expanding” i2’s technologies, said managing director Hollie Moore in a statement.

Ajay Shah

Merrill Lynch and Wachovia Capital Markets served as financial advisors and King & Spalding served as legal advisor to ChoicePoint. Kirkland & Ellis served as legal advisor to Sumeru.

The i2 deal is the third Sumeru has agreed, with capital to come presumably from its debut fund which is targeting $1 billion. Last week, Sumeru agreed to provide an undisclosed amount of equity financing to support the merger of Audio Visual Innovations and Signal Perfection. The new company, AVI-SPL, is a provider of global audio video systems and integration services. Its first deal was the acquisition of Mobile Messenger in October 2007.

Sumeru was brought under Silver Lake’s umbrella in December 2006, when the Silicon Valley buyout firm absorbed Shah Capital, a tech-focussed private equity firm founded in 2004 by California entrepreneur Ajay Shah, who now heads Sumeru.

Parent Silver Lake closed its third buyout vehicle on $9.3 billion in March, a steep increase from its second fund, which closed on $3.6 billion in April 2004.