Chicago-based Internet consulting firm Divine Inc. has continued its acquisition of financially troubled companies, announcing that it will buy Burlington, Massachusetts-based Open Market Inc. in a stock deal it says is worth about US$59 million.
Divine Chief Marketing Officer Jeff Schultz said he expects the purchase to be completed by the end of the fourth quarter and added that the company is working on more acquisitions in the coming months. Divine doesn't plan on retrenching to ride out the current economic downturn; instead, the company intends to use the difficult times to grow through acquisition, he said.
"Frankly, we are one of the few companies that have a very aggressive change strategy," Schultz said.
Divine announced the acquisition of Fracta Networks on Aug. 6, eShare Communications Inc. on July 9 and DataBites Inc. on May 21, among others.
"The little-known Divine is making a name for itself as a savior of slumping technology companies, quickly amassing a portfolio of has-beens or wounded firms," said a statement released by Boston-based AMR Research Inc. today following the announcement of the sale.
AMR said the deal gives Open Market "much needed viability, particularly a much larger sales force to make sure it is even considered in deals now lost to competitors."
According to statements released by Open Market during the past year, the company has posted more than $26 million in losses and has seen a shake-up among several of its top executives. Open Market has lost money for the past five years, according to its 2000 annual report, with last year's net loss at $37.8 million.
"For now, Open Market's viability gets some 'divine' intervention, now it needs to build momentum and land more big deals. And Divine needs to give Open Market the room and the support to do so," the AMR statement says. "Divine also needs to reconcile all of its purchases and combine them into a comprehensive package."
The acquisition of Open Market will allow companies to take all of the internal data they generate and all the external data that comes in and put it into a package that is employees can use easily, according to Schultz. For instance, a company may need to access internal strategy documents and external stock quotes, and Divine can now allow it to do that, he said.
Divine and Open Market said they signed an agreement that allows the Divine sales force to begin selling Open Market products immediately, according to a statement released today.
Divine shares were trading at $0.93 after hitting a high of $1.31 Thursday. Open Market was trading at $0.93 a share, down from yesterday's close of $1.11. Open Market stock is down considerably from its 52-week high of $9.62 per share.