Funding Pact Boosts MarchFIRST

MarchFIRST (Nasdaq: MRCH) picked up 9/32 to 1 29/32 Thursday after the Internet services company said it secured a US$150 million investment from a private equity firm.

In return, MarchFIRST said it will sell Francisco Partners convertible preferred stock that could give the firm a stake of up to 32 percent in the company.

David Stanton, a partner and founder of Francisco Partners, said that MarchFIRST's "experienced management team, talented professionals, breadth and depth of service offerings, strong client base and proven track record" should help the company" become a long-term leader in the e-services marketplace.

"We plan to actively support MarchFIRST as it deepens relationships with existing clients and pursues high-value opportunities with leading organizations in key vertical industries," Stanton said.

"Francisco Partners is a $2.5 billion private equity firm, and its founders are well-established investment and technology professionals," said marchFIRST chairman and chief executive officer Robert Bernard. "MarchFIRST has gained not only an investor, but also a strategic adviser with an expansive partner network and an excellent reputation."

Added Bernard, "This relationship provides us with the financial flexibility we sought to execute our global client relationship business model."

The company expects to complete the transaction by year's end. In the meantime, Francisco Partners will provide $25 million in interim financing.

Francisco Partners focuses on structured investments in technology. The company's holdings include Globe Span, Inc., Paradyne, Legerity and Zilog.

Despite the small gain, the stock price for MarchFIRST remains far below its 52-week high of 72 15/16. In November, the company cut 1,000 jobs in a bid to lower operating expenses.