The stock of Shutterfly (NASDAQ: SFLY) enjoyed a nice bump last week amid reports the digital photo sharing service is being targeted in a buyout valuing the company around $2 billion. Silver Lake, Bain Capital and Hellman & Friedman are among those rumored to be interested, and a deal at such a price would be one of 2014’s biggest public-to-private acquisitions (albeit in a tame year worldwide for the category, according to the PitchBook Platform). Final bids could be expected next month, according to Bloomberg and Reuters.
Shutterfly offers easy-to-use templates for customers to create items like photobooks, cards, prints and calendars with their own pictures (much like Hewlett-Packard's Snapfish). The PE attention is indicative of Shutterfly's current issues, as a decline in earnings per share and net income were noticeable earlier this year. Those issues reflect fierce industry competition along with the seasonal fluctuation seen in Shutterfly's business. Overall, the deal is reminiscent of Hellman & Friedman's take-private of Getty Images in 2008, and also illustrates how traditional media businesses transitioning between digital and print can serve as prime targets for PE operational expertise.