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Deluxe to Acquire Aplus.net, Raises Q2 Estimate

Thursday, July 09, 2009

Press release from the issuing company

ST. PAUL, Minn.,  -- Deluxe Corporation today 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).

 

 

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