Battered by the IT spending slowdown, business software and services provider divine Inc.said it will file for Chapter 11 bankruptcy protection while it seeks to reorganize and sell off assets.
The Chicago-based company, formerly called divine Interventures back when it was an Internet incubator, began to focus on software and services for the enterprise in 2001. Its first product was the Enterprise Content Center, a suite of e-business content and management tools designed to serve intranets, Web sites and enterprise portals.
But the company, founded in 1999, was battered as IT spending went into a prolonged slump. Its stock price was down to 6 cents a share in mid-morning trading.
The bankruptcy filing was taken “to protect the value and viability of divine’s operations while it works to restructure its liabilities” and resolve the remaining economic issues facing its RoweCom subsidiary, the company said.
The bankruptcy case was filed in Boston, where the RoweCom bankruptcy case is under way. Divine is selling its RoweCom subsidiary to Birmingham. Ala.-based EBSCO Industries Inc. RoweCom provides e-commerce solutions for the corporate and institutional acquisition of magazines, newspapers, journals and books.
divine’s subsidiary divine/Whitman-Hart, formed with the 2001 acquisition of certain assets of marchFIRST, is not included in the filing.
The company said that it has received a letter of intent from financial investment firm GTCR Golder Rauner LLC to acquire all of its business operations.
Divine also canceled the release of its fourth-quarter and end-of-year 2002 financial results, which had been scheduled for today. For the third quarter of 2002, the company reported a net loss of $37.7 million or $1.80 per share.