SHOREVIEW, Minn.--(BUSINESS WIRE)--Deluxe Corporation (NYSE: DLX) announced today that its WAUSAU Financial Systems, Inc. subsidiary has acquired the remittance processing business of First Data Corporation (NYSE: FDC). The business is now an integral part of Deluxe Financial Services’ growing suite of Treasury Management Solutions.
The remittance processing business acquired by Deluxe provides a robust suite of services across payment types, as well as image capture software. The solutions are designed to improve operational efficiency, reduce costs, and improve funds availability for financial institutions and corporate clients.
“This is another strategically important acquisition for Deluxe Financial Services as we cement our position as a leading provider of receivables management solutions,” said John Filby, President of Deluxe Financial Services. “This acquisition reinforces our longstanding ‘best-in-class’ brand promise and the ongoing market trend toward outsourcing technology enabled solutions and services to trusted FinTech partners of scale. We remain committed to delivering industry leading receivables management solutions for the most demanding financial institutions and corporate clients in the world.”
The all-cash acquisition was completed for approximately $93 million and was financed through the Deluxe credit facility. This acquisition was first mentioned in Deluxe’s April 26 earnings release, again in a June 18 acquisition update press release and in Deluxe’s July 25 earnings release. Deluxe expects the acquisition to deliver revenue of approximately $10 million in the third quarter and $19 million in the fourth quarter, or $29 million in 2018. The third quarter and full year revenue outlook ranges will be lower than previously communicated by $7 million as a result of the timing of the acquisition closure. The acquisition is expected to be slightly dilutive to Deluxe’s earnings per share for the year.
This acquisition, as well as the acquisitions of WAUSAU, FISC, Data Support Systems, and RDM Corporation that were made over the last four years, is evidence of Deluxe’s strategic commitment to serve commercial financial institutions. Deluxe Treasury Management Solutions allow financial institutions and corporations to accelerate working capital, improve straight-through remittance processing, and drive profitable growth with in-house, hosted or Business Process Outsourcing (BPO) solutions for receivables management, remote capture, payment processing services, and treasury management onboarding.
“This transaction is a win for both First Data and Deluxe,” said Frank Bisignano, Chairman and CEO of First Data. “It is consistent with First Data’s commitment to optimize our portfolio, allowing us to focus on businesses that are core to our growth strategy. As a result of this acquisition, Deluxe will bring together deep industry experience and core offerings in lockbox services and software as a leader in treasury management.”
As part of the agreement, First Data will continue to offer remittance processing services through a referral arrangement with Deluxe.
Deluxe Corp. is a growth engine for small businesses and financial institutions. Nearly 4.4 million small business customers access Deluxe’s wide range of products and services, including customized checks and forms, as well as website development and hosting, email marketing, social media, search engine optimization and logo design. For our approximately 4,900 financial institution customers, Deluxe offers industry-leading programs in checks, data driven marketing, treasury management and digital engagement solutions. Deluxe is also a leading provider of checks and accessories sold directly to consumers. For more information, visit us at www.deluxe.com, www.facebook.com/deluxecorp or www.twitter.com/deluxecorp.
Certain statements contained in this communication, including statements about the acquisition of First Data’s remittance processing business, its effects, and the Company’s expectations and outlook, constitute “forward-looking statements.”
Forward-looking statements can usually be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “evolve,” “expect,” “forecast,” “intend,” “looking ahead,” “may,” “opinion,” “plan,” “possible,” “potential,” “project,” “should,” “will” and other expressions which indicate future results, events or trends. Such statements reflect management’s 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 remittance processing business acquisition may involve unexpected costs or liabilities; Deluxe may be unable to achieve expected synergies and operating efficiencies from the acquisition within the expected time frames or at all; the integration of the acquired business into Deluxe’s business may be unsuccessful, or more difficult, time consuming or costly than expected; revenues following the acquisition may be lower than expected; operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the acquisition; uncertainties surrounding the acquisition; the impact that a deterioration or prolonged softness in the economy may have on demand for the Company’s products and services; the inherent unreliability of earnings, revenue and cash flow predictions due to numerous factors, many of which are beyond the Company’s control; declining demand for the Company’s check and check-related products and services due to increasing use of other payment methods; intense competition in the check printing business and continued consolidation of financial institutions and/or additional bank failures, thereby reducing the number of potential customers and referral sources and increasing downward pressure on the Company’s revenue and gross profit; risks that the Small Business Services segment strategies to increase its pace of new customer acquisition and average annual sales to existing customers, while at the same time maintaining its operating margins, are delayed or unsuccessful; risks that the Company’s other recent acquisitions do not produce the anticipated results or revenue synergies; risks that the Company’s cost reduction initiatives will be delayed or unsuccessful; performance shortfalls by one or more of the Company’s major suppliers, licensors or service providers; unanticipated delays, costs and expenses in the development and marketing of products and services, including web services and financial technology solutions; the failure of such products and services to deliver the expected revenues and other financial targets; risks related to security breaches, computer malware or other cyber-attacks; risks of interruptions to the Company’s website operations or information technology systems; risks of unfavorable outcomes and the costs to defend litigation and other disputes; and the impact of governmental laws and regulations.
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 Company’s current expectations are contained in the Company’s Form 10-K for the year ended December 31, 2017.