EXCLUSIVE-Buyout firm Apollo Global in the lead to acquire Shutterfly -sources
By Greg Roumeliotis
June 10 (Reuters) - Private equity firm Apollo Global Management LLC APO.N is in the lead to acquire Shutterfly Inc SFLY.O after making the highest offer for the U.S. digital imaging company, people familiar with the matter said on Monday.
A deal would be the culmination of several years of private equity interest in Shutterfly, which allows customers to make photo books, cards and gifts from their photos. Its business has become increasingly commoditized and competitive, forcing it to explore a sale.
Apollo's exact offer could not be learned, but the deal would value Shutterfly at close to $2 billion, excluding its debt pile of more than $900 million, the sources said.
If the negotiations are completed successfully, a deal could be announced as early as this week, the sources added, asking not to be identified because the matter is confidential.
Apollo declined to comment, while Shutterfly did not immediately respond to a request for comment.
Shutterfly shares jumped 7% in pre-market trading in New York on the news on Monday to $52.50.
Headquartered in Redwood City, California, Shutterfly makes personalized consumer photo products such as photo books, holiday cards, invitations and stationary.
Founded in 1999, Shutterfly faces increasing competition from other online digital photography services companies such as Snapfish and Vistaprint, as well as brick-and-mortar retailers, such as Wal-Mart, Costco and Target, that offer low-cost digital photography products and services.
Shutterfly was approached by several buyout firms over the years about a deal, including by Thomas H. Lee in 2016 and Silver Lake Partners LP in 2014, Reuters has previously reported.
In February, Shutterfly said its board had formed a committee to explore its options with the help of investment bank Morgan Stanley MS.N after receiving acquisition interest from an undisclosed party. The company also announced that its Chief Executive Christopher North would leave the company in August.
Last year, Shutterfly acquired privately-held Lifetouch, which helps schools and families shoot professional photos, for $825 million in cash.
(Reporting by Greg Roumeliotis in New York; Editing by Kirsten Donovan)