EX-99.1
Published on April 12, 2010
Exhibit 99.1
Deluxe Corporation
P.O. Box 64235
St. Paul, MN 55164-0235
(651) 483-7111
For additional information:
Jeff Johnson
Treasurer and VP Investor Relations
(651) 787-1068
NEWS RELEASE
April 12, 2010
DELUXE ACQUIRES CUSTOM DIRECT, INC.
Acquisition Strengthens Deluxes Direct to Consumer Segment
St. Paul, Minn. Deluxe Corporation (NYSE: DLX) announced today that it has acquired all the outstanding shares of Custom Direct, Inc. (Custom Direct), a Joppa, Maryland based leading provider of direct-to-consumer checks. Deluxe paid $98 million in cash of which approximately $86 million was used to extinguish Custom Directs outstanding debt. The acquisition was funded with a draw on the Companys credit facility.
The acquisition of Custom Direct creates a tremendous opportunity to further execute on a key core focus area of our strategy, optimizing the cash flow in our direct-to-consumer channel, said Lee Schram, chief executive officer of Deluxe. We expect the transaction will offer significant value to shareholders as we enhance the revenue and cost efficiencies in this profitable channel.
During the remainder of 2010, the acquisition is expected to generate approximately $60 million in revenue and over $15 million of additional operating cash flow. The acquisition is also expected to be neutral to earnings per share after recording approximately $2 million in transaction-related costs in 2010, and be accretive to EPS by over $0.10 in 2011. Included in these estimates are revenue synergies from improvements to call center scripting and cost reductions from leveraging procurement for reduced delivery and media spend, increased manufacturing efficiencies and SG&A cost reductions. Also, the company stated that it has no immediate plans to close any facilities as a result of the acquisition.
About Deluxe Corporation
Deluxe Corporation is a growth engine for small businesses and financial institutions. Through its
industry-leading businesses and brands, the Company helps small businesses and financial
institutions attract and retain customers. The Company employs a multi-channel strategy to provide
a suite of life-cycle driven solutions to its customers. In addition to its personalized printed
products, the Company offers a growing suite of business services, including logo design, payroll,
web design and hosting, business networking and other web-based services to help small business
grow. In the financial services industry, Deluxe sells check programs and fraud prevention,
customer loyalty and retention programs to help banks build lasting relationships and grow core
deposits. The Company also sells personalized checks, accessories and other services directly to
consumers. For more information about Deluxe, visit http://www.deluxe.com.
About Custom Direct
Custom Direct is a provider of consumer checks, selling under multiple brands including the Check
Gallery®, Styles Checks® and Artistic Checks® names. In addition,
Custom Direct produces other stationery products, custom designs and printed products, including
print-on-demand products marketed to consumers and small businesses through its Janzoon.com
website. Immediately prior to the acquisition by Deluxe, Custom Direct spun-off its
EZShieldSM product line to EZShield Parent, Inc., a subsidiary of EdgeStone Capital
Equity Fund III of Toronto, Ontario. For more information on EZShield, visit
http://www.ezshield.com and on Custom Direct, visit http://www.cdi-us.com.
Forward-Looking Statements
Statements made in this release concerning the Companys or managements intentions,
expectations, or predictions about future results or events are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect
managements current expectations or beliefs, and are subject to risks and uncertainties that could
cause actual results or events to vary from stated expectations, which variations could be material
and adverse. Factors that could produce such a variation include, but are not limited to, the
following: the impact that a further deterioration or prolonged softness in the economy may have on
demand for the Companys products and services; further declines in the Companys market
capitalization which could trigger additional non-cash asset impairment charges; the inherent
unreliability of earnings, revenue and cash flow predictions due to numerous factors, many of which
are beyond the Companys control; declining demand for the Companys check and check-related
products and services due to increasing use of alternative payment methods; intense competition in
the check printing business; risks that the Custom Direct acquisition does not produce the
anticipated results or revenue synergies; risks with respect to the Companys ability to identify,
complete on acceptable terms and in a timely manner, and successfully integrate new acquisitions,
including Custom Direct; risks that the Companys cost reduction initiatives will be delayed or
unsuccessful; performance shortfalls by the Companys major suppliers, licensors or service
providers; unanticipated delays, costs and expenses in the development and marketing of new
products and services, including new e-commerce, customer loyalty, fraud monitoring and protection
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 the
effect of any of the foregoing factors as they relate to Custom Direct. Our forward-looking
statements speak only as of the time made, and we assume no obligation to publicly update any such
statements. Additional information concerning these and other factors that could cause actual
results and events to differ materially from the Companys current expectations are contained in
the Companys Form 10-K for the year ended December 31, 2009.
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