Deluxe Corporation

Deluxe has closed its acquisition of Celero Commerce, a financial technology company focused on optimized payment solutions for small to mid-sized businesses and strategic partners. The deal significantly expands Deluxe Merchant Services, creating a scaled payment platform expected to process more than $70 billion of annual gross transaction volume and moving Deluxe toward top 10 non-bank merchant acquirer status. The transaction is expected to be accretive to adjusted EPS in the first full year, with more than $15 million in identified cost synergies. The combination adds over 55,000 merchant relationships and 130 bank partners to Deluxe's existing base. Deluxe will provide updated full-year 2026 guidance when it reports second quarter results on August 5, 2026.

An exceptionally tight circle of mega-cap stocks dominates benchmark averages, with passive indexing funnelling trillions into the top of the S&P 500 and starving the broader equity landscape of liquidity. Rob Isbitts highlights the micro-cap space as a contrarian opportunity, noting the First Trust Dow Jones Select MicroCap Index Fund (FDM) has just $250 million in assets under management compared to the Vanguard S&P 500 ETF (VOO) which is about 3,700 times larger. FDM focuses on the lowest market-cap deciles, filtering for value and liquidity metrics, and trades at under 13 times trailing earnings. Isbitts points to specific holdings with attractive charts, including Deluxe (DLX) at less than 7 times trailing earnings, Business First Bancshares (BFST) poised to benefit from lower interest rates, and LSI Industries (LYTS) which just broke out to a new high. He advises equal-weighted position sizes and shorter tactical horizons due to structurally thinner liquidity in micro-caps.

Deluxe Corporation has agreed to acquire financial technology company Celero Commerce for $625 million, plus certain seller transaction expenses and other adjustments. The deal is expected to advance Deluxe's transformation strategy, shifting its revenue mix toward higher-growth Payments and Data segments, with combined Payments and Data businesses projected to reach 57 percent of 2026 pro forma revenues, up from 31 percent in 2020. Celero generated over $200 million in revenue in 2025 with a 28 percent adjusted EBITDA margin, and the acquisition is anticipated to be accretive to adjusted EPS in the first year after closing, while also expanding revenue growth and adjusted EBITDA margin rates and generating strong cash flow, including over $15 million in anticipated cost synergies to be fully realized within 24 months. The transaction will be funded through committed debt financing, including a $375 million incremental Term Loan A from a five-bank syndicate led by BofA Securities and drawing on Deluxe's existing revolving credit facility, and is expected to close in the third quarter of 2026. Deluxe reaffirmed its previously issued fiscal 2026 guidance and plans to provide an updated outlook reflecting the acquisition after the deal closes.