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  • Fresche Legacy Gets $6 Million Infusion To Expand

    December 7, 2015 Dan Burger

    It might surprise some people to read about companies that are investing in the IBM midrange platform. After all, at least one of the top research and analysis firms has had IBM i, and before that the iSeries, and before that the AS/400, on a death watch for something like a dozen years or so. Not everyone believes that. And here’s a $6 million reason why the IBM i market is worthy of investment.

    When IBM i ISV Fresche Legacy looked for an investor that could give the application modernization software company a lift, it found rather quickly what it needed to free up the balance sheet for new acquisition ventures and existing product enhancements. The new investor is Fonds de solidarité FTQ, which manages a pension fund for Québec’s largest labor union.

    “Going out to the investment community and telling our story was very gratifying and validating,” says Andy Kulakowski, president and CEO of Fresche Legacy. “We found a strong appetite for our business.”

    Four firms expressed interest in investing in Fresche Legacy, according to Kulakowski, who says it’s a positive sign for the vision and strategy of his company and a good sign for the IBM i community because when investors are examining Fresche Legacy, they are examining IBM i. The names of the other investment interests were not reported.

    The Fresche Legacy board of directors, earlier this year as it plotted the company’s strategic direction, determined another financial partner would be needed to get the company to the next level, says Nick Cristiano, chief financial officer at the Montreal, Canada-based company. Kulakowski and Cristiano talked with IT Jungle about the investment last week.

    Cristiano described the goals the board has set include additional mergers and acquisitions as well as product development and commercialization. Current working capital limited the opportunities in both areas. Fresche Legacy merged with IBM i software vendor looksoftware in 2014 and it acquired another IBM i vendor, Databorough, in 2013.

    “There is no acquisition target in mind at this time,” Cristiano says, “but a small war chest allows us to move quicker when acquisition targets arise. We are actively searching for opportunities in complimentary technologies and services that would grow our business. We see tremendous potential in further consolidating the market for modernization solutions.”

    Kulakowski cited several areas within the company that would benefit from the investment. Specifically mentioned were sales and marketing to increase the international exposure of Fresche Legacy’s products and to more aggressive increase partner network. Product development and completion of the company’s application modernization tools portfolio were also noted.

    The X-Analysis tool, which Fresche acquired with the purchase of Databorough, is slated for possible extensions and the looksoftware suite of application development and application modernization tools will receive enhancements more quickly as a result of the new investment money, according to Kulakowski, who describes Fresche as a company that modernizes and extends the life of legacy applications running on IBM Power Systems. He also mentioned an increased emphasis on the Synon/2E community.

    “FSTQ’s investment will allow us continue our aggressive growth,” Kulakowski says. “Legacy technology is pervasive within the IBM i market and legacy systems are difficult to maintain, hard to integrate with newer technology and don’t easily adapt to evolving business realities.”

    Although four organizations were interested in an investment opportunity with Fresche, Cristiano says FSTQ was the best fit for several reasons. FTSQ has a similar objective and a time line that is not as aggressive as some private equity funds in the United States, he says. “They have the right reason for this type of investment. It’s beyond return on investment. It’s having the right culture with an emphasis on job creation.”

    Having like-minded investors is important. Fondsaction, also a labor-sponsored fund, and FSTQ have made joint investments in the past. Both firms emphasize socially responsible investments that favor worker friendly practices, job creation, and job retention.

    Prior to investing in Fresche, FSTQ completed an assessment that included employment records, hiring practices, fair compensation, employee turnover, the environment for job creation, benefits for employees. It also interviewed employees to gain a closer perspective of the employer/employee culture.

    Fresche Legacy was created in 2010 when the management of an IT modernization company called Speedware purchased the company’s assets. The new company was named name Fresche Legacy and it acquired the German IT modernization company Skykora. At that time, the company employment was approximately 45. Fresche Legacy currently has 125 employees in 11 time zones.

    RELATED STORIES

    Fresche Legacy Advances App Dev Integration Plan

    Modernization Projects On The Rise, Says Fresche Legacy

    IBM i Modernization Gets A Fresche-look

    Fresche Preps IBM i Customers for SQL Migrations

    Fresche Legacy Automates DDS to DDL Conversions

    Love Your Legacy, But Look To The Future

    Databorough Snapped Up By Fresche Legacy

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Volume 25, Number 61 -- December 7, 2015
THIS ISSUE SPONSORED BY:

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Table of Contents

  • A Rising Tide
  • Fresche Legacy Gets $6 Million Infusion To Expand
  • ISVs In Denial About Software Licensing
  • As I See It: Revolving Door
  • IBM i Horror Story With A Happy Ending

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