A Compelling Carve-Out Opportunity in Data Visualization and Analytics Software
Carving-out corporate divisions that are no longer core to the parent company can be an opportunity to enhance the growth and positioning of these businesses. Creating stand-alone operations often requires new investments to reinvigorate sales, marketing, and product development. This puts a premium on extensive operating skills and carve-out experience to successfully manage the transition. As Silver Lake Sumeru, the predecessor fund to Sumeru Equity Partners, was pursuing an investment thesis in data analytics, the team discovered a carve-out opportunity. ChoicePoint, a public data aggregation company, had a division called i2 that developed advanced analysis and visualization technology solutions to help law enforcement, military intelligence, and other government agencies monitor, manage and solve investigations more effectively.
Re-positioned For Growth
The Sumeru team worked in close partnership with i2 to establish operations independent from the parent company, strengthen sales and marketing, develop new product concepts, and expand into adjacent markets.
We created finance, IT and HR capabilities within i2 so it could function as a stand-alone company with operations in both the U.S. and Europe, and hired a new CEO, Chief Operating Officer and Head of Sales. Sumeru also reorganized i2’s sales team around different go-to-market channels. To provide enterprise-level access to data and analytics tools and improve connections among analysts, we worked with the company’s engineering team to develop a new enterprise software architecture.
The Sumeru team also expanded i2’s product offerings and increased its customer base by completing two add-on acquisitions in the U.S. and Europe.
Acquisition by a Global Software Company
Over the three-year period of Silver Lake Sumeru’s investment and partnership with i2, the company’s revenues increased more than 25%, EBITDA increased more than 50% and the number of employees grew by nearly 20%, all driven by sales growth. The business attracted the interest of several potential strategic acquirers, and IBM bought i2 in 2011.