Item 1.01 Entry into a Material Definitive Agreement.
On March 8, 2022, Deluxe Corporation, a Minnesota corporation (the "Company"),
through its subsidiary, Deluxe Small Business Sales, Inc., entered into a Share
Sale Agreement (the "Sale Agreement") with Web.com AUS Holdco Pty Ltd, an
Australia corporation ("Purchaser"). Pursuant to the terms and conditions of the
Sale Agreement, on the closing date (the "Closing Date"), Purchaser will acquire
all of the outstanding shares of Hostopia Australia Holding Co Pty Ltd., a
wholly-owned subsidiary of Deluxe Small Business Sales, Inc. With this
transaction, the Company will exit its web hosting and related businesses in
Australia.
The aggregate purchase price payable to the Company in connection with this
transaction is $23 million USD, $22 million of which will be paid on the Closing
Date, subject to customary adjustments for changes in net working capital, and
$1 million of which will be deferred and paid one year following the Closing
Date (subject to set-off rights for customary indemnities by the Company). The
closing is subject to customary conditions, including receiving certain
Australian regulatory approvals. The Sale Agreement contains customary
representations, warranties and covenants of the Company and Purchaser. From the
date of the Sale Agreement until the Closing Date, the Company is, with limited
exceptions, required to conduct its Australian business in the ordinary course
consistent with past practice and to comply with certain covenants regarding the
operation of its business. The representations and warranties of the parties
contained in the Sale Agreement will terminate and be of no further force and
effect as of the Closing Date, except for those covenants that by their terms
expressly apply in whole or in part after the closing.
The Sale Agreement provides for certain termination rights of the Company and
Purchaser, including termination by the Company or Purchaser if the closing has
not been consummated on or before June 30, 2022, provided that this termination
right will not be available to any party that fails to perform any material
obligation under the Sale Agreement.
Item 2.01 Completion of Acquisition or Dispostion of Assets.
The information set forth in Item 1.01 is incorporated by reference into this
Item 2.01.
Item 7.01 Regulation FD Disclosure.
On March 8, 2022, the Company issued a press release announcing its entry into
the Sale Agreement, which press release is attached as Exhibit 99.1 to this
Current Report on Form 8-K and incorporated herein by reference.
Pursuant to General Instruction B.2. to Form 8-K, the information set forth in
this Item 7.01, including Exhibit 99.1, shall not be deemed "filed" for purposes
of Section 18 of the Securities and Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section.
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Cautionary Statement Regarding Forward-Looking Statements
Statements made in this Current Report on Form 8-K concerning the Company, the
Company's or management's intentions, expectations, outlook 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
management's current intentions, expectations or beliefs and are subject to
risks and uncertainties that could cause actual results or events to vary from
those stated, which variations could be material and adverse. Factors that could
produce such variations include, but are not limited to, the following:
potential continuing negative impacts from pandemic health issues, such as the
coronavirus / COVID-19, along with the impact of government restrictions or
similar directives on the Company's business or financial condition;
uncertainties related to the Russia-Ukraine dispute; the impact that further
deterioration or prolonged softness in the economy may have on demand for the
Company's products and services; the Company's ability to execute its
transformational strategy and to realize the intended benefits; 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 checks and check-related products and services and business forms;
risks that the Company's strategies intended to drive sustained revenue and
earnings growth, despite the continuing decline in checks and forms, are delayed
or unsuccessful; intense competition; continued consolidation of financial
institutions and/or additional bank failures, thereby, among other things,
reducing the number of potential customers and referral sources; risks related
to the Company's acquisition and integration of First American Payment Systems;
risks that future acquisitions will not be consummated; risks that any such
acquisitions do not produce the anticipated results or synergies; risks that the
Company's cost reduction initiatives will be delayed or unsuccessful; risks
related to any divestitures; 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 and treasury management
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, regulations or investigations. These statements speak only
as of the time made, and management assumes 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 current
expectations are contained in the Company's Form 10-K for the year ended
December 31, 2021. Neither the Company nor management undertakes any obligation
to update or revise any forward-looking statements to reflect subsequent events,
new information or future circumstances.
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Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
99.1 Press Release of Deluxe Corporation, dated March 8, 2022
101.INS XBRL Instance Document - the instance document does not appear in the
Interactive Data File because its XBRL tags are embedded within the
Inline XBRL document
101.SCH XBRL Taxonomy Extension Schema Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover page interactive data file (formatted as Inline XBRL and contained
in Exhibit 101)
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