Hostopia Acquires Assets

Hostopia, the web hosting unit of Deluxe Corporation (DLUX) , has signed a definitive agreement to purchase the shared hosting assets of, which will retain its dedicated and managed hosting operations.

Rich Miller

July 9, 2009

2 Min Read
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Hostopia, the hosting unit of Deluxe Corporation (DLUX) said Wednesday that it has signed a definitive agreement to buy the shared hosting assets of Hostopia will acquire more than 80,000 customers using's shared hosting, hosted e-commerce stores, managed e-mail services and domains, while will retain its dedicated and managed hosting operations.

Hostopia said it had also completed the purchase of the search engine marketing (SEM) firm MerchEngines. Deluxe said it will pay approximately $30 million for these companies in the third quarter and expects they will contribute approximately $7 million of revenue.

"Within weeks of closing,'s shared hosting customers will see a service upgrade offering numerous new and enhanced web services including: mobile messaging, logo design, social networking for business, ecommerce, website design, email marketing, and other promotional materials that help small businesses get and keep customers," said Colin Campbell, president of Hostopia.

"This is a very beneficial and strategic transaction for both sides and, most importantly, we feel that's shared hosting customers will be in excellent hands with Deluxe," said Tyler Newton, Chairman of and partner at Catalyst Investors, majority stakeholder of "This sale allows us to focus on growing and expanding our mid-to-large enterprise-managed hosting service offering in our core managed and dedicated server business." RBC Daniels represented in the transaction.

The MerchEngines deal will allow Hostopia to enhance its customer offerings in search engine marketing, an increasingly important "add-on" for web hosting customers looking to drive traffic to their web sites. "Many small business owners want to grow online, they just don't have the expertise to do it themselves," said Campbell. "By adding MerchEngines' SEM expertise, Hostopia now offers our partners and customers a complete, easy-to-use and cost-effective Web solution - one that levels the playing field for small business owners by providing SEM services that historically have been only available to larger companies or enterprise advertisers."

Deluxe acquired Hostopia last June. The transaction is expected to close by the end of July while the MerchEngines transaction closed on July 8, 2009. Following the sale, will continue to focus on growing and expanding its mid-to-large enterprise-managed hosting services. The growth private equity firm Catalyst Investors is a majority stakeholder in

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