Shutterfly, Inc. (NASDAQ:SFLY) Expects Final Bids from Bain Capital and Silver Lake

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By mmejia on August 21, 2014 Company, Consumer Staples

News has it that Bain Capital LLC and Silver Lake Partners LP are competing against each other as to which corporation will get the rights of Shutterfly, Inc. (NASDAQ:SFLY), an online service known for picture sharing features.

According to the people familiar with the matter, both Bain capital and Silver Lake, have reached to the second round of the action. However, both the companies are deliberating as to whether they should submit their final bids or not.

On the last trading day, August 20, 2014, the stocks of Shutterfly, Inc. (NASDAQ:SFLY) increased by 2.4 percent and reached to $51.5 when the news of Silver Lake and Bain Capital qualifying for the next round hit the market.

Although the price of anticipated offers is unknown yet, sources have it that the equity firms will have to take loans of a total amount of 7 times the earnings of Shutterfly, Inc. (NASDAQ:SFLY) before the amount of tax, interest, amortization and depreciation.

According to the Thomson estimates, the value of Shutterfly, Inc. (NASDAQ:SFLY), excluding the debt and equity of the company, is estimated to be around 11.5 times the last year’s EBITDA of the company and 9.4 times the anticipated EBITDA of the company.

The sources familiar with the matter said that the deliberation process was secret and private. They further disclosed that a low price offering may not be accepted by Shutterfly, Inc. (NASDAQ:SFLY) as the board is expecting quite high prices.

The representatives of Shutterfly, Inc. (NASDAQ:SFLY), Bain Capital and Silver Lake refused to comment on the news.

A number of private equity firms are interested in Shutterfly, which suggests that the company might be able to get itself a leveraged deal.

Sources have it that the company hired the services of Qatalyst Partners LLC, an investment firm, earlier this year, to explore its options.

Shutterfly, Inc. (NASDAQ:SFLY) has seen a 20 percent increase in its Standard & Poor’s 500 stock index. The shares of the company remained at the same price though.

Shutterfly, Inc. (NASDAQ:SFLY) is a California based company. The company is located in Redwood City and it allows the users to print their pictures onto the gift cards and photo books. Shutterfly currently competes with Snapfish, a picture service offered by Hewlett Packard Corporation.

The company generated revenues of $159.1 million during its second quarter of the year 2014. However, the overall earnings of the company went in a negative, with a loss of 63 cents on each share.

Sources have it that Shutterfly, Inc. (NASDAQ:SFLY) is expecting final bids by the end of September 2014.

Moreover, according to the Bloomberg reports, Hellman & Friedman has also submitted its final bid for Shutterfly. The representative of Hellman & Friedman refused to comment on the news.

Coming to the stock price of Shutterfly, Inc. (NASDAQ:SFLY), the company, on the last trading day, August 20, 2014, started its stocks at a price of $49.59 and closed at a price of $50.47. The company has a market capitalization of $1.91 billion with a beta of 1.36.