Silver Lake Sumeru Invests in Accounting Software Firm

While Silver Lake remains locked in a battle over Dell, another arm of the technology-focused investment firm is quietly doing other deals.

Silver Lake Sumeru, the firm’s middle-market group, is leading an investment in BlackLine Systems, a maker of accounting software, the company is announcing on Thursday. The investment, for a majority stake in the company, is worth about $220 million, according to a person briefed on the matter.

The deal came after “pretty fierce competition” among investment firms, another person familiar with the investment said. BlackLine hired Evercore Partners to handle a process that ultimately led to Silver Lake Sumeru, which has a $1.1 billion fund.

The investment is intended to help the company grow around the world. Therese Tucker, the founder of BlackLine, will remain chief executive, according to the announcement.

“We see an enormous opportunity to bring world-class transaction analytics and workflow technology to financial process management,” Hollie Moore Haynes, managing director at Silver Lake Sumeru, said in a statement. “BlackLine Systems provides the core foundation for that strategy.”

Based in Los Angeles, BlackLine makes a suite of accounting software that is intended to replace tools like Excel and simple pencil and paper. The product is available on a “software as a service” model, in which the vendor hosts the software and offers it to customers over the Internet.

In the first half of this year, the company’s revenue increased more than 55 percent from the same period a year earlier, according to Thursday’s announcement. BlackLine’s customer base â€" which includes the Nasdaq OMX Group, Zillow, the Hearst Corporation, AT&T and Boeing â€" has had average annual growth of 50 percent since 2006, according to the company.

Ms. Tucker, who founded the company in 2001, was previously the chief technology officer of SunGard Treasury Systems. The company’s Web site describes her as a “software developer at heart.”

“Because of BlackLine’s strong leadership position in the market and impressive year-over-year growth, we had a choice of investment partners from a number of reputable firms,” Ms. Tucker said in a statement. “We selected Silver Lake Sumeru because we felt that their culture and values closely aligned with BlackLine’s.”

Silver Lake Sumeru is partnering in the investment with BlackLine’s management and Iconiq Capital, an investment firm catering to wealthy families. Ms. Tucker and Mario Spanicciati, executive vice president of BlackLine, are retaining “significant” equity stakes, the announcement said.

Ms. Haynes of Silver Lake is joining BlackLine’s board, along with Jason Babcoke, a prinicpal of the investment firm, and John Brennan, a managing director. Will Griffith of Iconiq is also joining BlackLine’s board.

In addition to Evercore, BlackLine received advice from the law firm Munger, Tolles & Olson. The investment group was advised by the law firm Kirkland & Ellis.