This Sunday, Silver Lake agreed that they would buy a small amount of stake in Locaweb. It is a Brazilian website hosting firm but that amount paid or the stakes bought, neither could be confirmed to this point. Sumeru, the Silver Lake unit which invests in mid-sized technology service companies, cut the deal this Sunday. Its investors have poured about $14 billion in companies such as Skype and NASDAQ OMX. It is known that Brazil is among the five top internet markets in the world and Silver Lake may be looking to capitalize.
Brazil is South America’s largest economy and it is still growing. On an average, the sales of web domains rise by about 27% each financial year. Silver Lake Sumeru representatives are convinced that there is massive growth to be capitalized on in Brazil and the current investment secures their share. They even plan on expanding their investments in the country and its information technology industry. It may be expected that they would cease any opportunity that they get.
Locaweb first made its mark in the country in the latter part of the 1990s. Many other companies surged during the period alongside them in the fields of hardware, software and other IT avenues. Many of those companies sank due to the downfall of the internet industry in the US but Locaweb and other survivors battled it through to see good times again. Quite a few of those companies have induced public investments over the years and Locaweb was no different. In Brazil, IT is looked at as a cheap yet effective way of solving problems in their economy.
Locaweb was created in 1998. Ever since, their annual revenue report showed a consistent rise by about 40 per cent. Last year saw them earning around $76 million worth from sales made. The funds received from the Silver Lake stakes buyout will be used to expand their base of operations from last year. It seems they are also intent on growing by acquiring smaller companies. They want to use the method to offer more services to the clientele.
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