Divine Interventures prices its public offering at $9 
Outlook uncertain after seven delays 

By Rob Kaiser 
Tribune Staff Writer 
July 12, 2000 
Chicago Tribune

After a seven-month ride of spectacular hype and souring expectations, Divine Interventures Inc. will land
Wednesday in the hands of its ultimate judges—the investing public—as the company finally goes forward
with its initial public offering of stock.

The Lisle-based firm, which previously has delayed the IPO seven times, attached a $9 per share price tag to its
offering of 14.3 million shares after the markets closed Tuesday.

Once pitched as a savior to Chicago's dot-com community, Divine was obliged to reduce the offering
price and scramble to get investors interested in the stock. After filing for an IPO in December, the company
pumped up the offering to raise as much as $460 million and then drastically scaled it back to its current level of
under $130 million as investor interest dissipated.

Although Divine priced the stock at the low end of its $9 to $10 range, analysts still are not especially optimistic
that the shares will move higher when they begin trading on Wednesday. Divine is a so-called incubator of
high-technology companies, taking stakes in and developing Internet start-ups at a time that such
incubator ventures have fallen out of favor among investors.

"I still think the thing is destined for disaster," said Jeff Hirschkorn, senior marketing analyst with New
York-based IPO.com. "I'm surprised it's actually coming out."

If Divine did not go forward with the IPO this month, the company risked losing the chance to raise $220.1 million from a group of private investors, including Microsoft Corp., Compaq Computer Corp. and Level 3
Communications.

Without the cash from the IPO and private placement, the company also would have had to dramatically scale
back its plans to build a presence in Chicago and around the country as a creator of Internet-related companies.

"It would have been better if they could have waited," said George Nichols, a stock analyst at Morningstar Inc.
in Chicago.

Founded last year, Divine quickly became the most high-profile Internet firm in the Chicago area, pulling
together $400 million in funding from a range of Chicago business leaders, Microsoft and Dell Computer Corp.,
and attracted media attention from around the country. Tribune Co. also has an investment in Divine.

Divine's chief executive, Andrew "Flip" Filipowski, pitched the company as a new-economy conglomerate
that would put young dot-com firms on a path to quick maturity.

The company quickly founded or invested in more than 50 firms and brought in more than 750 employees,
including the people at the companies where it made investments.

But Divine's rapid growth slowed earlier this year when its public offering suffered repeated delays. The
company laid off 29 employees in May due to a slowdown in new investments and pushed back
construction on its $62.9 million headquarters campus at Goose Island, which originally had a move-in date of this fall.

Most technology companies that were preparing public offerings for this spring and summer have backed off,
either pulling their planned IPOs or going into a holding pattern to see if the market improves for such ventures.

Divine bucked that trend. In May, the company dumped its lead investment banker, Credit Suisse First Boston,
which wanted Divine to postpone its public offering until the fall. 

"It's heartening, I think, for the local community for the stock to finally come out," Nichols said. "If they have
any gain at all, it will be successful. I'm pretty sure there will not be a big pop, though."

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