Advantage Payroll Services Announces Strategic Alliance With New England Business Service, Inc.

Business Editors

AUBURN, ME--(BUSINESS WIRE)--March 27, 2000

Advantage Payroll Services, a leading nationwide payroll and tax services provider, today announced that it has entered into a strategic alliance with New England Business Services, Inc (NYSE:NEB). Under this agreement, New England Business Service will market Advantage Payroll Services throughout the United States and Advantage will provide the fulfillment of these services. Additionally, as part of this alliance, New England Business Service, Inc. has acquired a minority equity interest in Advantage.

Under the agreement, New England Business Service has purchased 10% of the common stock of Advantage, and has also obtained incentive-based warrants to potentially double that position over the next five years. New England Business Service, Inc. will market payroll services under its nationally recognized brands and distribution networks such as NEBS and McBee. Advantage will provide all of the payroll processing activities using its well-established and highly reliable infrastructure.

Charles W. Lathrop, Jr., President and CEO of Advantage commented, "We are excited by the opportunity presented through an alliance with New England Business Service, Inc. Advantage is one of the fastest-growing payroll processing companies in the US. We see this partnership as giving our business even greater exposure in our targeted small business market where NEBS has an unparalleled reputation and reach. We believe this arrangement will substantially benefit both partners, as well as the many small business customers who will utilize this service."

Robert J. Murray, Chairman and CEO of New England Business Service, Inc., said, "This is a major milestone in our strategic direction as we now add a highly complementary service offering to our long-standing success in providing printed and other products to small businesses. Payroll processing is a rapidly growing, but largely under-developed opportunity in the small business marketplace, with attractive margins and continuing revenue streams. We have tested offering payroll processing services and believe they can be effectively marketed through all of our channels, ultimately making them accessible to most of our 2.5 million small business customers. We further believe that the investment component of the relationship further solidifies the ties between NEBS and Advantage, while providing NEBS shareholders an excellent opportunity to share in the value created through this alliance."

Murray continued, "Advantage is the ideal partner, with uncompromising standards for quality, support and service. Importantly, it has the capabilities and expertise needed to readily service a large number of small business customers. The two organizations are culturally well-aligned; we look forward to a long, beneficial partnership with them."

Based in Auburn, Maine, Advantage Payroll Services was founded in 1967, and is one of the top five payroll service providers in the US. Advantage services 25,000 small and mid-sized business clients across the entire U.S. through 40 offices in 26 states, processing over $10 billion in payroll annually. Advantage has the industry's highest Certified Payroll Professional (CPP)-to-client ratio and enjoys a client satisfaction rate exceeding 98%. More information about Advantage Payroll Services is available at the Company's Web site at http://www.advantagepayroll.com.

New England Business Service, Inc. is a leading business-to-business direct marketing company with 2.5 million active small business customers in the United States, Canada, the United Kingdom and France. The Company supplies a wide variety of business products and services which are marketed through direct mail, telesales, a direct sales force, dealers and the Internet. More information about New England Business Service, Inc. is available at the Company's Web site at http://www.nebs.com.

This press release contains forward-looking statements, including expectations for future benefits arising from the arrangement between Advantage Business Services Holdings, Inc., and New England Business Service, Inc. These forward-looking statements reflect the Company's current expectations. There can be no assurance that the Company's actual results will not differ materially from those expressed or implied by these statements due to various risks and uncertainties, including NEBS limited experience in selling and marketing payroll processing services, the presence of larger and more experienced competitors, and other business factors described in the Company's Annual Report on Form 10-K for the fiscal year ended June 26, 1999, and Quarterly Report on Form 10-Q for the quarter ended December 25, 1999 on file with the Securities and Exchange Commission.