Deluxe Corp. is paying $70 million for a Canadian provider of online banking software and digital marketing solutions.
The acquisition of RDM Corp. is the latest deal by Deluxe to bolster its range of services for the commercial side of financial institutions.
"What we are trying to do is what we call smart, small to midsize, tuck-in acquisitions where they make sense for us and we can absorb them and they give us capabilities and new technologies," Deluxe Corp. CEO Lee Schram said Monday. "We are trying to be smart and measured in what we do."
RDM, based in Waterloo, Ontario, was founded in 1987. Its software solutions help clients process payments electronically. RDM provides web-based and mobile remote deposit capture software, which allows customers to scan checks and deposit through an online connection instead of going to a bank.
RDM also makes a range of digital imaging scanners for banks and other firms to enable secure payments. RDM said in a release its customers include four of the top 10 banks in the U.S. and 31 percent of the top 100 Fortune 500 firms.
Shoreview-based Deluxe has three units: Direct Checks Unlimited, its traditional check-printing business for consumers and financial institutions; Deluxe Small Business Solutions, which includes services such as logo design, web hosting and search engine marketing; and Deluxe Financial Services, which offers business services for financial institutions.
Schram said buying RDM will boost Deluxe's position and offerings within its financial services business. "We are trying to get deeper with the financial institutions in data driven marketing and deeper within treasury marketing services," he said.
In October 2014, Deluxe acquired a company called Wausau Financial Systems that offered a range of financial technology solutions for financial institutions. "When we bought Wausau, we got what we call the commercial part of the bank," Schram said.
Since then, the company has made three other acquisitions to provide more commercial services.
The RDM deal "gives us an opportunity to get stronger in the remote deposit capture space, and we are excited about that," Schram said.
Although RDM's overall revenue for fiscal year 2016 was down 9.4 percent to $21.3 million, the company's payment-processing customer base grew 9 percent in 2016 and its mobile payment processing revenue grew by more than 40 percent. For the fiscal year ended Sept. 30, the company made $3.9 million. RDM attributed the revenue drop to a reorganization at a key distributor.
Analysts expect Deluxe to report nearly $2 billion in annual sales for 2016.
The RDM acquisition is expected to close in March.
Shares of Deluxe were up 22 cents to close Monday at $74.72. Shares of RDM Corp. were trading at $5.43, up 63 cents.