Online photo book and card retailer Shutterfly to buy Tiny Prints
March 22, 2011 10:13 AM
Shutterfly Inc. , an online retailer that enables consumers to turn their photos into scrapbooks, greeting cards and calendars, says it has bought Tiny Prints Inc., a private company that operates two stationery, photo book and card e-commerce sites.
Shutterfly, No. 67 in the Internet Retailer Top 500 Guide, says it will pay $141 million and at least 3.9 million shares of its stock for Tiny Prints, No. 227 in the Top 500 Guide. Tiny Prints stockholders will own about 12% of the combined company. The three co-founders of Tiny Prints, along with all of its employees, will join Shutterfly, which expects the deal to close within 60 days. Both companies are based in the Silicon Valley region of California.
Tiny Prints operates Tinyprints.com and Weddingpaperdivas.com.
"Together, we will build on our portfolio of iconic brands and combine our passionate, entrepreneurial employees to truly transform the cards and stationery market,” says Jeffrey Housenbold, president and CEO of Shutterfly. “We believe the integration of our businesses will create near-term and long-term opportunities for enhanced merchandising, accelerated product innovation and significant scale efficiencies in manufacturing, customer service and marketing.”
The acquisition will make Shutterfly the leading e-commerce company for cards and stationery, according to a research note from Colin Sebastian, an analyst who follows e-commerce stocks at Lazard Capital Markets. “We view the acquisition positively given the unique positioning of TinyPrints, the large market opportunity and synergies,” he writes, adding that the greeting card market remains dominated by bricks-and-mortar retailers.
Shutterfly last month reported that annual sales for 2010 increased 25% year over year to $307.7 million. The online retailer said this week that net revenue for 2010 should be between $53 million and $55 million, compared with nearly $46 million for the same period last year.