124 million dollars…now that is a ridiculous sum of money. An amount that most of us would stare at in awe, mouth agape; possibly capable of muttering a stretch of incoherent babble, but probably not. This is the amount of money that Hostopia went for in its acquisition by Deluxe Corporation. Hostopia is the one of the leading providers of private-label web services and e-mail solutions. A trusted name, Hostopia is known for offering quality products at affordable prices and they are now, at least as of this past week, owned by Deluxe Corporation. Deluxe Corporation is a company which assists financial institutions and small businesses in expanding their businesses and making them grow through a vast range of innovative products and services in fraud prevention, customer loyalty and brand building. The Whir released a feature article yesterday outlining some discussion of the deal between Hostopia and Deluxe Corporation, an interesting read and very informative – you can check it out here, as well as their detailed article on some of the finer points of the merger:
According to the announcement, Deluxe, which “helps financial institutions and small businesses better manage, promote, and grow their businesses,” will acquire Hostopia in an all-cash deal that values the company at approximately $124 million Canadian.
The merger agreement will see Deluxe pay $10.55 for each outstanding Hostopia common share.
In July 2006, Hostopia filed its IPO, intending to raise approximately $40 million.
“We are very excited with the prospect of providing Hostopia’s industry-leading, private-label web services to our small business customers and collectively growing our product and service offerings as we move forward together,” said Lee Schram, CEO of Deluxe, in the press release. “Hostopia has grown top line revenue in excess of 20 percent in each of the last three years. While we have substantial knowledge and expertise in selling to the small business market, we believe that Hostopia’s ability to attract new customers and provide additional services to that market will increase the power of our offerings. This acquisition is in line with our long-term strategy of broadening the products and services we offer to small businesses to manage, promote and grow their businesses. We also believe that the transaction will offer significant value to our shareholders as we continue to introduce growing products and services with recurring revenue streams.”
Something tells me that the kids of the guys upstairs at Hostopia will be getting Official Red Ryder Carbine-Action Two-Hundred-Shot Range Model Air Rifles for Christmas this year.