Chicago Sun Times
June 6, 2000
BY HOWARD WOLINSKY BUSINESS REPORTER
With guidance from a new lead investment bank, divine interVentures inc., the Lisle Internet operating company, is aiming to boost cash from its initial public offering later this month by 50 percent, according to federal filings.
Divine will seek to sell 14.3 million shares at up to $15 each to raise $214.3 million. That's changed from April when divine indicated it would sell 20 million shares at $7 each to raise $140 million.
Andrew J. "Flip" Filipowski, divine's founder, last week dropped Credit Suisse First Boston as divine's lead investment banker because Credit Suisse wanted to delay the IPO until the fall.
Filipowski named Robertson Stephens, the San Francisco investment bank, to lead the renewed effort described in filings made Monday with the Securities and Exchange Commission.
"The increase in divine's offering is surprising," said George Nichols, an Internet stock analyst with Morningstar Inc. in Chicago. "The company has a lot of bravado to increase it so dramatically. I am not sure if the market can handle an offering of this size at this price."
Nichols said that decreasing the number of shares and increasing the target price for the shares could help give divine "a pop. A lot of investors will be chasing a few shares."
Divine also plans at the time of the IPO to raise $233 million from a private placement to investors such as Aon Corp., Compaq Computer Corp., Hewlett-Packard Co., marchFIRST Inc. and Microsoft Corp.
Technology stocks have been out of favor recently, resulting in many tech IPOs being withdrawn.
But Filipowski told the Chicago Sun-Times last week that he and Robertson Stephens were confident that divine was strong enough to stand up in a hostile market. He also said that by being among the few tech stocks to go public at this time, it would benefit from extra attention from stock sales forces.
Bear Stearns & Co. and Donaldson Lufkin & Jenrette remain co-managers of the sale, while William Blair & Co. has been added to the list.
The federal filing showed that during the first quarter ended March 31, divine tallied revenues of $5.2 million compared with revenues of $1 million in the eight months ended Dec. 31.
Divine said it lost $44.2 million, or $7.79 per share, in the quarter compared with an eight-month deficit of $9.4 million, or $4.59 a share.
However, the company's current assets soared 42 percent, to $242.5 million, during the same period, equal to 4.7 times liabilities. In the 1999 period, assets totaled 5.2 times liabilities.
Divine also reported that on March 31, it had $213.4 million in cash.
Filipowski told the Sun-Times last week that divine, which backs more than 50 tech companies, had more than $100 million, enough to last 20 months without a cash infusion.