Divine Reviewing Options; Bankruptcy May Loom

Firm is exploring strategic options, including asset divestitures, selling of businesses or declaring bankruptcy.

Divine Inc., an e-business software company formed from the acquisition of more than a dozen Internet startups, may go the way of many a dot-com bust.

The Chicago-based developer of content management, collaboration and customer interaction management software announced Tuesday that it has retained Broadview International LLC to help it explore strategic options, including asset divestitures, selling of businesses or declaring bankruptcy.

Divine has already sold off operations of its RoweCom Inc. subscription management business. The company had grown by acquisition over the past two years, acquiring about 15 companies, under the leadership of Andrew "Flip" Filipowski, who had formed Platinum Technology International Inc. from more than 70 companies before selling it to Computer Associates Inc. in June 1999.

Divines most recent acquisitions include search software developer Northern Light Technology LLC, marketing software company Delano Technology Corp., customer interaction management software developer Synchrony Communications Inc. and Internet services company Viant Corp.

But the value of the company has gone the way of the rest of the Internet economy. Divine lost $49.6 million on $162.2 million in revenues in its most recent quarter, ended Sept. 30. The companys stock has dwindled to just pennies a share even after it conducted a 1-for-25 reverse split to avoid NASDAQ delisting last year.

Last May, Divine received a $61 million cash infusion from Oak Investment Partners, which was supposed to carry the company to profitability by the fourth quarter.

Instead, the company indicated Tuesday that its efforts to minimize operating expenses and other liabilities have not paid off and it must pursue other options.

Divine spokeswoman Susan Burke said it would be business as usual at Divine until a long-term solution is found.

"During this process, Divine will continue to operate normally, provide superior support to our customers and work on product enhancements and upgrades," Burke said in a statement.