Deluxe Buys Hostopia for More Than $121M

Printing services provider Deluxe Corp. said Thursday it will buy Hostopia.com Inc. for approximately $121.7 million in cash.

Deluxe pledged to pay $10.55 Canadian ($10.36 U.S.) for each Hostopia share. Hostopia is headquartered in Ontario, Canada. Deluxe executives said they don’t expect the acquisition to significantly affect 2008 earnings and operating cash flow.

Deluxe is a printing services provider targeting SMBs and consumers. Its products include small business logo design, e-mail marketing, print-on-demand and personalized printed items such as checks and forms. The Minnesota-based company said buying Hostopia will help it increase its reach among SMBs — Hostopia has targeted that market through its wholesale channel, made up of telecom carriers, cable companies, ISPs and Web hosting providers.

“We believe the transaction delivers outstanding value to the Hostopia stockholders,” said Colin Campbell, CEO of Hostopia. Customers will get access to more products and services, and Hostopia will have new ways to reach clients, like through direct mail and sales through financial institutions, he said.

Both companies’ boards have unanimously approved the deal, which is expected to close in the third quarter.