Private equity firm Apollo Global Management LLC acquires Shutterfly for $2.7 billion

Shutterfly’s business has become increasingly commoditized and competitive, forcing it to explore a sale.

Apollo Global Management LLC, a private equity firm, has agreed to acquire U.S. digital imaging company Shutterfly Inc for $2.7 billion, including the company’s $900 million debt.

“The deal is the culmination of several years of private equity interest in Shutterfly, which allows customers to make photo books, cards and gifts from their photos” reported Reuters.

Shutterfly’s business has become increasingly commoditized and competitive, forcing it to explore a sale.

Apollo offer of $51 per share in cash represents a 13% premium to the company’s value on February 5, the last trading day before it announced it would explore a sale.

Incidentally, Apollo has also announced it would acquire Snapfish LLC, a privately held small internet-based retailer of photography products, which it will merge it with Shutterfly.

Headquartered in Redwood City, California, Shutterfly makes personalized consumer photo products such as photo books, holiday cards, invitations and stationary.

The company is facing increasing competition from online digital photography services companies, such as Vistaprint and Snapfish, as well as brick-and-mortar retailers, such as Target, Wal-Mart, and Costco which offer low-cost digital photography products and services.

Over the years, Shutterfly has been approached by several buyout firms, including by Thomas H. Lee in 2016 and Silver Lake Partners LP in 2014.

In February 2019, Shutterfly had said, its board had formed a committee to explore its options with the help of investment bank Morgan Stanley after receiving acquisition interest from an undisclosed party.

Shutterfly has also previously disclosed that Christopher North, its CEO would be leaving the company in August.

In 2018, Shutterfly acquired privately held Lifetouch, which helps schools and families shoot professional photos, for $825 million in cash.

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Categories: Creativity, Entrepreneurship, HR & Organization, Strategy

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