Shutterfly's $333 Million Deal for Tiny Prints

Posted Mar 22nd 2011 1:30PM by Tom Taulli
Filed under: Deals, Technology

Founded in 1999, Shutterfly (SFLY) is a dot-com survivor. In fact, the value of this photo site is now about $1.2 billion.

So why not pull off a big deal? Well, this week, Shutterfly agreed to pay $333 million for Tiny Prints. The transaction is a blend of stock and cash.

Founded in 2004, Tiny Prints operates two main websites: Tiny Prints and Wedding Paper Divas. They essentially provide personalized stationary, photo books and invitations. Moreover, the company has been effective in integrating with Facebook.

No doubt, Tiny Prints has been growing at a fast rate. Last year, revenue increased by 53% to $87 million. The company is also profitable.

Shutterfly also boosted its guidance for the next quarter. The forecast is for revenue of $53 million to $55 million and adjusted EBITDA of a loss of $1 million to a loss of $2 million (this includes a $1.1 million charge for the acquisition). The prior guidance was for revenue of $52 million to $53 million, with break-even for EBITDA.

All in all, the acquisition is a way to consolidate the industry. Keep in mind that the market opportunity for printed cards is about $12 billion.

So yes, Wall Street likes deal. In early trading Tuesday, the shares of Shutterfly were up 3.46% to $44.52.

Tom Taulli is the author of several books, including the Complete M&A Handbook and All About Short Selling.

Tags: inthenews, SFLY, Shutterfly, Shutterfly buys Tiny Prints