Divine will be cash flow positive in Q3, and profitable in Q4. Net income for the end of Q422001 was between $65-75 mil, and charges with acquisitions and cleaning up the problems in the acquired companies is $100 mil. Cash on hand is $140 million. The projected lowest cash level until the company turns cash positive (and thus will begin to add to their cash) is between $60-80 million. Only long-term debt is tied to the march 1st acquisition of $57 mil -- but not due until 2006. Financial expectations for 02 is $880 million in rev. Key to acquisitions (and the idea that these companies being bought can not stand alone) is that you reduce headcount in the first 90 days or so by 40%, increase sales productivity by selling total solutions with 400 person global sales force, and leverage cross sell opportunitities. If they had a stock price, rev multiple equal to the unprofitable players in the space (Broadvision, Interwoven, etc.), it would be 3x. Right now it is .3x. Thus they are targeting 5.80 a share for that kind of multiple. If they dominant, like they think they will, they will get a Siebel like multiple of 6.5 times...and a $12 a share price.
$140m cash is even less than what I thought they would have at this point. They're burning faster than my calculations gave them credit. And they've revised their "lowest cash level" downward from $90m to $60m. I personally don't think the cash burn will stop with them at $60m. Any whisper of an economic recovery and their best talent is as good as disappeared.
I just got back from a Happy Hour gathering for the roll-off of an independant who was on a project I was on at BBY through DVIN. Several Director-level managers from BBY were there, and naturally I quizzed them a lot about DVIN. They admitted that yes, one of their program managers did purchase an OpenMarket license, and the consensus among them was it was probably the stupidest move that Director ever made, and that manager probably won't be a manager for very long. They had other tools already that could have done the job, was their assessment (AFTER having examined the goods). So yes, DVIN made a slight chunk on that sale, but no, it won't be worthy of reference in future sales calls.
Also, as of tomorrow, the very last DVIN consultant rolls off of the very last project at BBY. The PSO side of the relationship is officially now dead.