CHICAGO (CBS.MW) -- To err is human; to do it with other people's

money is Divine.

With its incubation period apparently over and its stock price

hovering near a buck, suburban-Chicago-based Divine InterVentures

(DVIN: news, msgs) has decided to both change its name and focus on

software -- a business that, in theory, it should know best.

The company, henceforth to be known just as Divine Inc., announced

after the bell Tuesday that it would buy "enterprise information

portal solutions" company SageMaker as the first acquisition in a

"previously-announced strategy to consolidate companies in the most

promising digital economy sectors."

The all-stock deal, valued at $16.5 million, will give Divine "a

key component of a complete enterprise portal solution," said CEO

Andrew Filipowski in the announcement. Enterprise information

portals are "a natural fit" for Divine, he said, and "we will

continue to make strategic investments, partnerships and

acquisitions in technologies that round out our EIP solution."

Shareholder rights

Also on Tuesday, Divine said it has put into place a "stockholder

rights plan" to "deter abusive takeover tactics that can be used to

deprive shareholders of the full value of their investment."

While anyone who bought in at the time of the company's IPO last

summer has already seen the value of their investment dramatically

decline, that could be welcome news to big early-stage investors

like Microsoft (MSFT: news, msgs) and Dell (DELL: news, msgs) .

By the time Divine went public, after a trying trek to Wall Street,

much of the gild was already off the lilies of Web-related holding

companies like Internet Capital Group (ICGE: news, msgs) and CMGI

(CMGI: news, msgs) , and the stock has been brutalized almost from

its very first trade. On Wednesday, Divine closed up 19 cents to

$1.75.

The stock price has fallen so low that it lags the per-share value

of the company's cash reserves -- more than $200 million at the end

of 2000.

Abandoned by the analysts

Most equity research firms have lost interest in the company, so

there are few current notes on the company's performance or

prospects.

For Kaushik Shridharani of Bear Stearns, the sole remaining analyst

listed by First Call/Thomson Financial, Tuesday's announcements are

encouraging.

"It is closer to [Filipowski's] historical strength, so I think

this is probably indicative that Divine is returning to the area it

knows best -- software," he said. "They really are focusing on

assets that can generate far more tangible value than many of the

virtual business models that were being pursued."

Shridharani also praised the company for "being brutally honest

with themselves and relatively quick to stop funding those

companies that didn't seem worth it."

Filipowski made his name in Chicago by building the late Platinum

Technology International through an aggressive roll-up strategy

before selling it for about $3.5 billion to Computer Associates

International.

As a result of that deal, and a canny knack for self-promotion, he

became something of a poster child for high-tech businesses in

Chicago, feted by the local press and Mayor Richard M. Daley as

someone who would help the Windy City gets its share of the boom in

Internet business. While his role has morphed more into that of

whipping boy as the dot-com shakeout hit here -- along with the

rest of the country -- it may be too early to bring down the

curtain just yet.

"I think it is probably a really good development for Divine to

focus on the expertise of its founder," said J.B. Pritzker,

managing director of Evanston, Ill.-based William Blair New World

Ventures, and one of the few local technology-oriented investors

without a position in the company.

"They have the money in the bank, the relationships and the

management muscle to turn it into a successful software company,"

he added. Besides, based on his past record, "Flip is still the

most successful technology entrepreneur in town."

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