Companies and Brands

Shutterfly That Much Closer to Disappearing

Shutterfly Inc. (NASDAQ: SFLY) has been fighting an uphill battle for a while against big dogs like Facebook in the online photo publishing industry, and it thinks it has had enough. It is not a secret that for the past month Shutterfly reportedly has been looking for another firm to buy it out. Could this sale prove to be a disappearing act of sorts for this company?

As a reminder, 24/7 Wall St. had listed Shutterfly as one of 10 brands that would disappear in 2015. That does not mean that the company will implode, but our take is that Shutterfly would either go the way of private equity or would become part of a larger company.

Shutterfly increased its customer base by 13% in the first quarter to 2.55 million from the same period in 2013. Also, revenue rose by 22% from the previous year to more than $783 million. Despite these numbers, Shutterfly’s share price fell from $59.93 last August to $39.51 in June. Then came the report that the company was looking for a would-be buyer. Now there is more news out on that front as well, sending shares even higher.

Over the past month, since the reports were first made, Shutterfly has risen from a low in July of $42.96 all the way up to a high of $51.05 as of Wednesday. The company’s market cap is currently valued at about $2 billion, so in theory a sale price would be at or above that level.

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A few private equity firms are reportedly interested in Shutterfly. Bloomberg reported that the private equity firms of Hellman & Friedman and Bain Capital have submitted offers to acquire the company.

The big question here is what would happen to the Shutterfly brand if it gets bought out. In this case, it seems as though an acquisition of Shutterfly would most likely keep the brand name, but with a whole new set of owners. Shutterfly’s consensus analyst price target is $54.91, and the 52-week range is $36.30 to $58.83.

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