Divine interVentures Inc. has replaced its lead underwriter, but plans to charge ahead with its initial public offering despite worrisome market conditions.
Andrew “Flip” Filipowski, Divine’s chief executive, sent an e-mail Friday to board members of the Lisle-based company outlining plans to take the company public by the end of June. Divine, which invests in Internet companies and helps accelerate their growth, has scaled back and delayed its IPO in recent months.
The company now appears to be bucking the present wisdom that technology companies should wait to see if the market will again warm to such ventures.
Credit Suisse First Boston, which had been the lead underwriter, was replaced by investment banking firm Robertson Stephens. According to the e-mail, Divine decided to make the switch after several CS First Boston officials left the firm and its remaining investment bankers indicated they wanted to take a more cautious approach to the IPO, as many technology analysts have suggested in recent weeks. Officials at CS First Boston couldn’t be reached for comment on Saturday.
Divine now plans to begin its road show to potential investors the week of June 12 and go public some time between June 22 and 29, according to Filipowski’s e-mail.
“We are all confident we will get the job done, barring some extreme deterioration of the market from this point forward,” Filipowski wrote. “The markets have shut down most IPOs, but for companies with a compelling profile this may be an opportunity to get total dedicated attention from the investment bankers, their sales forces and from the institutions that are still buying quality.”
Reached by phone Saturday at his home in North Carolina, Filipowski said Divine’s plans for rapid growth depend on the infusion of cash that an IPO would bring.
Due to prior delays with its IPO, Divine earlier this month laid off 29 employees who were dedicated to evaluating future potential investments for the firm.
“If we were to not raise any more money, there would be a lot more people we would let go,” Filipowski said.
Divine’s plans to build a headquarters campus at Goose Island also hinge on being able to go forward with the public offering.
“With an IPO completed, the chances are pretty good that Divine would continue on with the project,” Filipowski said. “If the IPO would not occur, we would delay indefinitely the work at Goose Island.”
Divine plans to resubmit documents related to the public offering by Wednesday to the Securities and Exchange Commission.
The company will seek to raise between $150 million to $200 million with the IPO, while concurrently receiving an additional $300 million from corporate backers.
Held up as a New Economy conglomerate, Divine plans to make significant investments in young technology firms, accelerate their growth and spin them off to the public markets. But similar companies that are already publicly traded have recently seen their stocks nosedive. Two such firms, CMGI (a Divine investor) and Internet Capital Group, have plunged 73 percent and 88 percent, respectively, from their 52-week highs.
