Deluxe Corporation has acquired Custom Direct, Inc., a firm that provides direct-to-consumer checks. The sale price was $98 million, of which 86 million was used to extinguish Custom Direct's outstanding debt.
The acquisition was funded with a draw on Deluxe’s credit facility.
Custom Direct also produces other stationery products, custom designs and printed products, including print-on-demand products marketed to consumers and small businesses through its Janzoon.com web site.
Immediately prior to the acquisition by Deluxe, Custom Direct spun-off its EZShield product line to EZShield Parent, Inc., a subsidiary of EdgeStone Capital Equity Fund III of Toronto, Ontario
"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, Deluxe’s CEO, in a statement.
According to Deluxe, during the remainder of 2010 the acquisition is expected to generate approximately $60 million in revenue and more than $15 million of additional operating cash.
Deluxe’s estimates include benefits from improvements to call center scripting and operating cost reductions. Deluxe does not anticipate closing any facilities as a result of the acquisition.
