Summit Partners

THE SCOOP

The summit of success

Summit Partners was started in 1984 by former TA Associates employees Steven Woodsum and E. Roe Stamps and has since become one of the most prolific private equity funds in the business, successfully launching 14 different funds in 25 years.  The first fund, Summit Ventures, had a value of $160 million.  Summit Partners’ impressive history is backed up by the stats: the company has invested in more than 300 businesses, overseen 125 public offerings of portfolio companies and completed more than 115 strategic sales or mergers.  The company has offices in Boston, Palo Alto and London and employs more than 85 investment professionals.  Its managing directors boast more than 300 collective years of private equity experience.  The firm’s portfolio companies operate in a wide range of industries, including software, communications and technology, semiconductors and electronics, information services, financial services, business services, health care and life sciences, industrial products and consumer products.

Staying strong

The typical investment for Summit Partners is in later-stage companies that have a proven track record, as opposed to untested startups.  Summit Partners’ investments usually range from as little as $5 million to as much as $800 million in its portfolio companies.  The formula has yielded solid results for the firmâ€"companies that have been successfully taken public by Summit include Hyperion, MacAfee and Ameripath.  Summit’s track record for selling its portfolio companies is also quite strong.  Past mergers or acquisitions overseen by the company include the sale of TrelliSoft to the IBM Corporation in 2002, M-Audio to Avid Technology in 2004 and ProClarity Corporation to Microsoft in 2006.  Summit Partners’ current portfolio companies include Actix Limited, a wireless performing engineering company; Aurora Diagnostics, an anatomic pathology laboratory services firm; BWT Lighting, a lighting systems company; Focus Financial Partners, a wealth management and investment consulting firm; MEDITECH, a health care software solutions firm; and Welltec International, a company that provides precision robotic solutions for oil and gas wells.

Airborne grounded

Though many of Summit Partners’ profile companies are performing admirably even in a tough market, there is one that has recently run into a high-profile snag.  Summit Partners bought Airborne Health in 2005, hoping to cash in on what seemed to be an unstoppable phenomenon.  Airborne’s number one product is an herbal supplement which contains high amounts of Vitamin C and claims to ward off diseaseâ€"it was touted as an essential remedy for those entering into germy situations like airplane travel.  In late 2006, reports surfaced that Summit Partners was looking to sell Airborne for a big profit.  The company’s sales for that year were more than $300 million, and rumors swirled that the small company could fetch as much as $1 billion if it were sold.  However, many claimed that because Airborne’s marketing claim of preventing disease was unsubstantiated by science, there might be problems for the company.  The naysayers were right.  A class action lawsuit was soon filed against the company for false advertising.  On March 24, Airborne agreed to pay $23.3 million to customers who claimed to have been bamboozled.  Airborne remains a part of Summit Partners’ portfolio but currently has only a fraction of the value.

Tapping the Asian market

The success of Summit Partners in Europe was brought about by a technique that many questioned at first.  The technique involves a team of junior professionals who would cold-call senior corporate executives in an attempt to stir up an investment.  This process could take months, sometimes even years, before the initial contact.  This cold-calling tactic, however, worked wonders for Summit Partners as it was able to close a deal with Vente-Privee, an online wholesale business that sells high-end designer clothing at a bargain, in 2007.  This revelation inspired Summit Partners to venture out to farther countries like India and China.  The seed was planted when Summit Partners hired Indian nationals and Mandarin speakers to break through the language barrier.  Before opening shop in Asia, though, the firm would source deals through its offices in London and Palo Alto.


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Summit Partners


222 Berkeley Street
18th Floor
Boston, MA 02116
Phone: (617) 824-1000
Fax: (617) 824-1100
www.summitpartners.com

STATS


  • Employer Type: Private
  • Founding Managing Directors: E. R. Stamps, S. Woodsum, G. Avis
  • 2009 Employees: 165

Major Office Locations

  • Palo Alto, CA
  • Boston, MA
  • London, United Kingdom

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