divine Moves to Acquire Managed Hosting Provider

Chicago’s divine inc. continued its torrid pace of acquisitions Friday when it bid to acquire publicly-held
Dallas-based Data Return Corp., a provider of managed hosting services for companies with Microsoft Corp.-based
technology applications.

The deal on the table is a stock-for-stock agreement in which divine offered to snap up all outstanding Data Return common stock for
a fixed exchange rate where each share of Data Return will be converted into the right to receive 1.9876 shares of divine’s stock.

divine, which in the last year has morphed into an
enterprise solution provider from its previous trade as incubator, said it plans to bundle Data return’s hosting services skill for
Microsoft applications with its array of professional services, software services and own portfolio of managed
services for Solaris, HP-UX, AIX, Oracle and BEA Systems.

Divine, which boasts 300 enterprise sales professionals, 2,000 professional services personnel and a $400 million software services
business, hopes that will help it better serve larger Global 500 firms. Data Return will be rolled into divine’s existing divine
Managed Services, which is led by Jim Dennedy. Data Return Chairman and Chief Executive Officer Sunny Vanderbeck will help Dennedy
run the bolstered division, which will work to expand its client base, product set and geographic reach.

The deal is symptomatic of enterprise-wide consolidation in the face of a bitter economic climate. Dennedy said the merged firms
will create a managed services powerhouse, which he predicted will reach “a critical mass of revenue, a clear path to profitability
entering the second quarter of 2002, a solid distribution channel into enterprise clients, and automated tools to scale the

“These are the key ingredients for a sustainable competitive advantage that will allow us to dominate the enterprise managed
services market. With $60 million of revenue already under contract, we expect that divine Managed Services will emerge as one of
the industry’s largest players with a revenue run rate of more than $100 million in 2002,” Dennedy said in a public statement.

With the merger agreement, divine and Data Return entered into a secured credit facility providing Data Return up to $12.8 million
in interim financing.

divine launched its first major enterprise suite in the form of the Enterprise Content Center last month.

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