Divine Acquires Data Return In $33 Million Stock Transaction

📅 November 2, 2001 - Web software and services firm divine Inc. said Friday it had purchased Web hosting firm Data Return for $33 million in stock.
Under the agreement, which was unanimously approved by the Board of Directors at each company, divine will acquire all outstanding shares of Data Return for a fixed exchange rate, with each outstanding share of Data Return converted into 1.9876 shares of divine's common stock.
"Data Return's proven experience, world-class technology and leading-edge capabilities in managed hosting are a compelling fit with divine's mission to be the preferred fully managed services provider for complex, mission-critical extended enterprise applications," said Jim Dennedy, President of divine. "Combined with Data Return, divine Managed Services achieves a critical mass of revenue, a clear path to profitability entering 2002, a solid distribution channel into enterprise clients, and automated tools to scale the business. These are the key ingredients for a sustainable competitive advantage that will allow us to dominate the enterprise managed services market."
Data Return, which provides hosting solutions based on the Microsoft platform, currently manages 1,500 servers housed in data centers managed by Level 3 Communications.
Founded in 1999, divine provides consulting services for companies in need of high-end enterprise solutions, and currently has 2,000 customers. The company also purchased content management specialists Eprise in September.
Shares in each company, which both trade on the Nasdaq, were largely unchanged on the news. Data Return, which is currently valued at 71 cents, lost one cent while divine, which is currently valued at 45 cents, lost a cent in trading Friday morning.