The company's stock rose more than 15 percent to 20.06 in afternoon trading on news of the deal.
Cambridge, a systems integrator and consulting firm, said it plans to build new companies and take them public--an attempt to share equity with its shareholders, employees, clients and partners. The company plans to host some start-up companies at its Cambridge, Mass., offices, providing them with strategic consulting, administrative and IT support and other services.
As part of the program, Cambridge employees would be able to participate in the initial public offering once an incubated company is set to go public.
Under the program, called NEWCO, or New Economy companies, Cambridge will invest capital in start-ups and forge partnerships with venture capital firms.
Cambridge said it will target a variety of companies, including application service provider (ASP) companies that host applications for customers, and "dot-coms."
In some cases, Cambridge said certain employees would also have the opportunity to become employees of the start-ups in the NEWCO program, should they choose that career path.
The program is expected to be completed in the first quarter of 2000, the company said. Cambridge said it's currently evaluating several investment opportunities, many that are brought to the company by existing clients and employees.