ST. PAUL, Minn., May 17 -- Deluxe Corporation announced today that it has entered into a definitive agreement to acquire New England Business Service, Inc., a Groton, Mass.-based leading provider of products and services to small businesses. Under the terms of the agreement, Deluxe will pay $44.00 in cash for each New England Business Service (NEBS) share and will assume NEBS' outstanding debt, which is estimated to total approximately $160 million at June 30, 2004. The acquisition is expected to close within 60 days and be accretive to Deluxe's earnings and cash flow for fiscal year 2005. It is expected to add between $.35 and $.45 in earnings per share and between $115 million and $130 million in earnings before interest, taxes, depreciation and amortization to Deluxe's 2005 financial performance. "The acquisition of NEBS creates a tremendous opportunity to better serve the small business segment," said Lawrence J. Mosner, chairman and chief executive officer of Deluxe. "The combined companies will serve more than 6 million small business customers with a broad range of products and services that address their everyday needs. As importantly, we are confident that the acquisition will deliver terrific value to our shareholders. By bringing these two companies together, we plan to realize cost synergies exceeding $25 million annually beginning in 2005. These synergies will be realized through eliminating redundancies, leveraging our shared services environment, and enhancing productivity by implementing lean principles and sharing best practices. In addition, we will introduce products across channels, thereby enhancing our product and service offerings to small businesses." Deluxe estimates that the combined company will generate annual revenues of nearly $2 billion. The transaction will be structured as a tender offer for NEBS shares. In accordance with the terms of the agreement, not later than May 26, 2004, a wholly owned subsidiary of Deluxe will offer to acquire all of the outstanding shares of NEBS common stock at $44.00 per share in cash. The tender offer will be subject to at least 67 percent of the outstanding NEBS shares, on a fully diluted basis, being validly tendered and not withdrawn. The tender offer will also be subject to regulatory approvals and other customary conditions. Any shares not acquired in the tender offer will be acquired at $44.00 per share in cash in a subsequent merger. Richard T. Riley, president and chief executive officer of NEBS, said, "We are pleased to be joining forces with Deluxe. Our two companies have many similarities, including closely aligned company cultures and a focus on helping small businesses manage, promote and grow their business. Combining forces creates a strong national presence for small business products and services, unparalleled in this industry segment today. This will enable the combined business to compete more effectively and grow more rapidly and profitably than they could as separate companies."