DVIN delayed again:|
Possible delay in IPO date
Analyst questions offering's strength
By Bruce Japsen
Tribune Staff Writer
June 28, 2000
Andrew "Flip" Filipowski's Divine Interventures Inc.
may delay its initial public offering yet again.
The offering of the Lisle-based Internet holding
company, which had been expected to price Thursday
and begin trading Friday, has already been altered a
number of times.
So even if the delay is only until early July, as is now
expected, analysts say it's yet another setback in a string
of troubles in Divine's effort to become publicly traded.
A Divine spokeswoman wouldn't comment, citing a
Securities and Exchange Commission-mandated quiet
period in preparation for the IPO. She didn't, however,
deny reports that Divine planned to push back the IPO
until sometime next month.
Only three weeks ago, Divine restructured its initial
public offering by changing terms of the deal and
"They have made a lot of different amendments," said
Michael Falbo, analyst with IpoPros.com, a Boulder,
Colo., firm that tracks initial offerings. "We don't believe
that this deal is in very good shape at all."
But a potential investor who had attended the company's
recent road show told Dow Jones News Service that
the delay most likely wasn't caused by a lack of investor
Divine will need such investor confidence, given that as
part of the June 5 restructuring it raised the price of the
shares to be offered to between $13 and $15 a share
from the earlier price of $6 to $8 a share. The number of
shares offered in the IPO was slashed to just under 14.3
million from 20 million. The restructured IPO is
expected to raise roughly $200 million, up from $140
million in its previous incarnation.
Founded last year by Filipowski, who is arguably
Chicago's best-known computer personality, Divine
quickly became the most high-profile Internet firm in the
area. The company pulled together $400 million in
funding from a range of Chicago business leaders,
Microsoft Corp. and Dell Computer Corp. and
attracted media attention from around the country.
Filipowski led the charge to promote the new firm,
delivering speeches around Chicago about how
old-economy stalwarts must quickly join the Internet
frenzy or face extinction.
Divine, he said, planned to invigorate the local dot-com
scene by investing in a range of young Internet and
high-tech firms. The company quickly founded or
invested in 52 firms and brought in more than 750
employees, including the people at the companies in
which it made investments.
But Divine's rapid growth slowed earlier this year after
the technology-laden Nasdaq stock market plunged,
temporarily sapping investor interest in speculative
technology ventures. Divine laid off 29 employees in
May as it slowed the pace of its new investments and
delayed construction of its new $62.9 million
headquarters campus on Goose Island, which originally
had a move-in date of this fall.
The City of Chicago contributed $14 million in tax
increment financing for the Goose Island project.
Divine's IPO, if it does indeed go forward, should
provide the company with the money it needs to
continue construction at Goose Island as well as expand
and open new offices in Austin, Texas, Seattle and
In addition to the cash infusion from the public offering,
Divine expects to receive $233 million from nine
companies in private placements to take place
concurrently with the IPO. The companies involved in
the private offering include Level 3 Communications,
Compaq Computer Corp. and 360 Networks Inc.
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. The
firm installed San Francisco-based Robertson Stephens
as its lead investment banker and announced plans to go
ahead with the IPO.
Pitched as a new-economy conglomerate, Divine invests
in Internet firms that do business with each other and
outside clients and rely on the parent company to
provide a range of resources and services. Divine
created numerous service companies to perform specific
functions, including those for public relations (Buzz
Divine), strategic consulting (Experience Divine) and real
estate (DotSpot Divine).