Chicago Sun Times
April 4, 2000
BY JESSICA MADORE FITCH BUSINESS REPORTER
Divine interVentures Inc. plans to sell fewer shares to the public in its upcoming initial public offering, and instead will sell stock privately to big name companies, including Microsoft Corp. and Compaq Computer Corp.
The Lisle-based Internet operating company, founded by software mogul Andrew "Flip" Filipowski, will offer 20 million shares publicly rather than the previously announced 50 million, according to a Monday filing with the U.S. Securities and Exchange Commission.
In conjunction with the public offering, divine will sell 45.7 million shares privately--as part of a "concurrent private placement"--to Aon Corp., Compaq Computer Corp., Hewlett-Packard Co., marchFIRST Inc., Microsoft Corp. and Stern Venture Partners. These companies won't be able to sell their stock for a year.
At an offering price of $7 a share, divine hopes to raise $140 million through the public offering and $235 million through the private placement.
The company also disclosed in the filing that it lost $8.8 million on $1 million in revenue between May 7 and Dec. 31 of last year.
As part of the private placements, divine agreed to form business relationships with the companies. For example, divine will develop Web site products based on Microsoft technology and will designate Hewlett-Packard as a "preferred" supplier of computer and storage solution hardware.
Divine's restructured offering arrives shortly after a rocky period for select small technology companies. ValueClick Inc., a Carpinteria, Calif., company that buys banner ad space online, sold shares to the public last week for $19 each. During the first day of trading--when IPO stock typically soars--ValueClick shares gained just 16 percent. At the end of trading Monday, ValueClick shares traded 11 percent below the offering price.
"The market conditions for IPOs are beginning to be unseasonably rough," said Jeff Hirschkorn, a senior analyst at IPO.com. "Divine has an unproven product, and their underwriter [Credit Suisse First Boston] may be getting the jitters."
Divine's IPO had been scheduled for this week, but the date was changed to "TBA." Divine, which plans to trade under the ticker symbol "DVIN" on the Nasdaq, still hasn't announced the date for its IPO roadshow.
In addition, Divine has nominated four new people to its board of directors, according to the SEC document: Peter C.B. Bynoe, 49, a partner at Piper Marbury Rudnick & Wolfe; Harold F. Enright Jr., 63, a vice president for corporate business development and technology at Compaq; Sanjay Kumar, 37, president of Computer Associates Inc., and David Tolmie, 44, president and chief executive of yesmail.com Inc.
Divine and its affiliates, which employ 654, plan to hire 1,000 new employees before year's end.
Divine also has its eyes on international growth. It signed an agreement to buy part of an unnamed company that will serve Latin America.
Divine also is looking to the Far East, where it hopes to establish operations "within the next three months," according to the document.