Two Acquisitions to Expand Small Business Web Services Customer Base
Deluxe Corporation (NYSE: DLX) announced two moves by its Hostopia unit to help expand Deluxe’s Web services customer base – a definitive agreement to purchase certain of the shared web services customer assets of Aplus.net and the completed purchase of the search engine marketing (SEM) firm MerchEngines.
Upon closing, the Aplus.net transaction will bring more than 80,000 small business subscribers of shared Web hosting, hosted e-commerce stores, managed e-mail services, domains and a variety of Web site management applications to the Deluxe customer base.
“Within weeks of closing, Aplus.net’s shared hosting customers will see a service upgrade offering numerous new and enhanced web services including: mobile messaging, logo design, social networking for business, ecommerce, website design, email marketing, and other promotional materials that help small businesses get and keep customers,” said Colin Campbell, president of Hostopia.
“This is a very beneficial and strategic transaction for both sides and, most importantly, we feel that Aplus.net’s shared hosting customers will be in excellent hands with Deluxe,” said Tyler Newton, Chairman of Aplus.net and partner at Catalyst Investors, majority stakeholder of Aplus.net. “This sale allows us to focus on growing and expanding our mid-to-large enterprise-managed hosting service offering in our core managed and dedicated server business.”
MerchEngines’ SEM solutions help small businesses acquire new customers by generating visitors to their websites. This acquisition adds new and more robust SEM capabilities to the Hostopia portfolio of services.
“Many small business owners want to grow online, they just don’t have the expertise to do it themselves,” said Campbell. “By adding MerchEngines’ SEM expertise, Hostopia now offers our partners and customers a complete, easy-to-use and cost-effective Web solution–one that levels the playing field for small business owners by providing SEM services that historically have been only available to larger companies or enterprise advertisers.”
The Aplus.net transaction is expected to close by the end of July while the MerchEngines transaction closed on July 8, 2009. The Company will pay approximately $30 million for these companies in the third quarter and expects they will contribute approximately $7 million of revenue and nearly flat earnings per share in the last half of 2009 after recording transaction and customer migration expenses.
The Company also reported today that it now expects diluted earnings per share for the quarter ended June 30, 2009 to range from $0.52 to $0.54, up from the previous outlook of $0.41 to $0.49. Adjusted earnings per share for the same quarter is expected to range from $0.54 to $0.56, up from the previous outlook of $0.43 to $0.51 and revenue for the quarter will be approximately $332 million. A favorable product mix and lower spending, plus a lower effective tax rate each contributed to the favorable results.
The Company previously announced that it will report its second quarter 2009 results on Thursday, July 23, 2009 prior to market open. On the same day, the Company will hold an open-access conference call at 11:00 a.m. EDT (10:00 CDT).
About Deluxe Corporation
Deluxe Corporation, through our industry-leading businesses and brands, helps small businesses and financial institutions better operate, protect and grow their businesses. The Company uses direct marketing, a North American sales force, financial institution referrals, independent distributors and the internet to provide a wide range of customized products and services: personalized printed items (checks, forms, business cards, stationery, greeting cards and labels), promotional products and merchandising materials, web hosting and other web services, fraud prevention and marketing services, financial institution customer loyalty and retention programs and business networking services. The Company also sells personalized checks, accessories, stored value gift cards and other services directly to consumers. For more information about Deluxe, visit www.deluxe.com. (Cherry Tree does not maintain, endorse, or make any representations as to the content accuracy or quality of this website.)
About Aplus.net and Catalyst Investors
One of the industry’s longest-running Web hosting and Internet services providers, Aplus.net specializes in helping small businesses build an online customer base with a comprehensive range of services that includes web design, shared hosting, online marketing, eCommerce, domain name registration, managed services and more. Following the sale, Aplus.net will continue to focus on growing and expanding its mid-to-large enterprise-managed hosting services. The growth private equity firm Catalyst Investors is a majority stakeholder in Aplus.net. Catalyst employs a rigorous research focus to identify investment opportunities in companies that exhibit strong revenue and margin growth. For more information about Aplus.net, visit www.aplus.net. (Cherry Tree does not maintain, endorse, or make any representations as to the content accuracy or quality of this website.)
MerchEngines.com is a Software as a Service (SaaS) solution that provides ad agencies, traditional media companies, online publishers, and local aggregators a hosted and fully managed search marketing solution. MerchEngines integrates traffic generation solutions with conversion technologies, such as call tracking/call recording and lead capture/lead management solutions, into one easy-to-use private label-able dashboard. There are three ways to get involved with MerchEngines: become a reseller partner and offer customized, private label, online advertising solutions to your advertisers; license MerchEngines’ technology and let MerchEngines manage your client’s online ad campaigns for you; or license MerchEngines’ technology and manage your advertising campaigns using an integrated end-to-end traffic generation and post click marketing platform. For additional information, visitwww.merchengines.com. (Cherry Tree does not maintain, endorse, or make any representations as to the content accuracy or quality of this website.)
SOURCE Deluxe Corporation
Certain statements contained in this release may be deemed to be forward-looking statements under certain securities laws, including the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities legislation, and Deluxe Corporation and Hostopia.com Inc. intend that such forward-looking statements be subject to the safe-harbor created thereby. These forward-looking statements include, but are not limited to, statements with respect to the acquisition of Hostopia by Deluxe and statements concerning Deluxe’s and Hostopia’s, or their management’s, current intentions, expectations, beliefs, projections or predictions about future results or events. Forward-looking statements are typically identified by words such as “believe,” “expect,” “forecast,” “anticipate,” “intend,” “estimate,” “plan” and “project” and similar expressions of future or conditional verbs such as “will,” “may,” “should,” “could,” or “would.” By their very nature, forward-looking statements require Deluxe and Hostopia to make assumptions and are subject to inherent risks and uncertainties that are difficult to predict and are generally beyond the control of Deluxe and Hostopia, which give rise to the possibility that certain predictions, forecasts, projections, expectations and other forward-looking information, including statements about the acquisition of Hostopia by Deluxe, will not be achieved. Deluxe and Hostopia caution readers not to place undue reliance on these statements as a number of important factors could cause actual results or events to differ materially and adversely from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in, or implied or projected by, the forward-looking statements. These factors include, but are not limited to, the following: the possibility that the acquisition of Hostopia by Deluxe does not close when expected or at all because required regulatory, shareholder or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all; the risks and uncertainties associated with Deluxe’s ability to complete the acquisition of Hostopia and to integrate Hostopia with Deluxe successfully; the ability to retain key personnel; the inherent unreliability of earnings, revenue and cash flow predictions due to numerous factors, many of which are beyond Deluxe’s and Hostopia’s control; developments in the demand for the combined companies’ products and services; relationships with major customers and suppliers; unanticipated delays, costs and expenses inherent in the development and marketing of new products and services, including new e-commerce, customer loyalty and business services, and the failure of such new products and services to deliver the expected revenues and other financial targets; the impact of governmental laws and regulations; and competitive factors. Readers are cautioned that the foregoing list of important factors is not exhaustive. Additional information concerning these and other factors that could cause actual results and events to differ from Deluxe’s and Hostopia’s current expectations are contained in Deluxe’s and Hostopia’s public filings with the Securities and Exchange Commission, including but not limited to the factors discussed under “Risk Factors” in Deluxe Corporation’s Form 10-Q for the period ended March 31, 2008 and Hostopia’s Form 10-Q for the period ended December 31, 2007 (each as updated by subsequent filings with the Securities and Exchange Commission).
Except as required by law, Deluxe and Hostopia assume no obligation to update the forward-looking statements contained in this release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.