BUFFALO, N.Y.--May 2, 2007-- MOD-PAC CORP., a commercial on demand printer and manufacturer of custom paper board packaging, today announced that it has acquired certain assets of DDM-Digital Imaging, Data Processing and Mailing Services, LC (DDM) for $850,000 in cash. DDM provides program and database management, variable imaging printing and mailing services for the financial services, marketing, advertising, medical and legal industries. DDM operates with the procedures and controls necessary for it to handle secure document mailings for the financial and legal markets, a key market for future growth. For the last four consecutive years, DDM has been awarded Inc.'s Inner City 100 list that recognizes the fastest growing private urban businesses in the United States. MOD-PAC expects that this transaction will not materially impact earnings over the next twelve months and will be accretive during the second year as activity ramps up. Daniel G. Keane, President and CEO of MOD-PAC CORP., commented, "The direct mail expertise, capabilities, market knowledge, and technology that we are acquiring from DDM are highly complementary to our core competency of high quality, short run variable print and fulfillment. Our strategy has been to expand our capabilities to offer a broader solution set for our customers. This transaction extends our reach into new markets and customers and measurably enhances our service offerings." Carl Falletta, who founded DDM in 1998, will be joining MOD-PAC's sales team. Mr. Falletta, who has over 10 years experience in the print, fulfillment and data management industry, earned his finance and MBA degrees from Canisius College. He is also a graduate of the University of Dayton's Center for Competitive Change Lean Manufacturing learning series which is based on the Toyota Production System. DDM's production equipment, information technology capabilities and a number of employees located in Buffalo, NY will relocate to MOD-PAC's facility. Mr. Keane added, "Carl and his team are a great addition to our operation. Carl has managed mailing and fulfillment services projects for companies such as RR Donnelly & Sons Co. and Quebecor World Inc.. The experience and knowledge Carl and his team have in postal regulations, intelligent mail, and project and database management are value propositions for prospective customers and truly provide a unique service capability for us. We envision a smooth integration over the next several months and the opportunity to win new business." Mr. Falletta commented, "MOD-PAC has valuable print capacity and economies of scale that will greatly benefit our current and prospective customers. MOD-PAC's proven capabilities to produce small variable print orders in high volumes combined with our capability in database management and postal regulations will allow us to effectively compete in our new target markets."