REDWOOD CITY — Shutterfly, a leading provider of personalized photos and gifts online, has closed an $825 million acquisition of Lifetouch, the national leader in school photography. The company financed the acquisition with the proceeds of an $825 million incremental term loan facility, which closed simultaneous with the acquisition.
“We are thrilled to welcome Lifetouch to the Shutterfly family, and are excited to bring together two undisputed leaders in adjacent verticals, both of which have the common mission of helping customers share life’s joy through photos,” said Christopher North, President & Chief Executive Officer of Shutterfly. “We are focused on realizing the three value creation opportunities that we previously articulated: gaining access to many Lifetouch customers as Shutterfly customers, offering Shutterfly’s broader product range to Lifetouch customers and accelerating the development of Lifetouch’s online platform, and realizing significant supply chain, manufacturing, and fulfillment synergies over time.”
Michael Meek will remain as President and Chief Executive Officer of Lifetouch, and will report to Christopher North. Lifetouch has been in business for 80 years and is based in Eden Prairie, MN.
Now that the acquisition has closed, Lifetouch will no longer be required to fund the Lifetouch Inc. Employee Stock Ownership Plan (ESOP). At closing, the sale proceeds were paid to the trustee of the ESOP who will distribute the proceeds to participants. Generally, participants will receive full payment for their ESOP interest in two installments, and following expiration of applicable escrows and final approval of the IRS, the ESOP will be terminated.
Shutterfly expects the acquisition to result in approximately $935.0 million of additional Net Revenues.