Apollo Global Management Inc.–owned Shutterfly Inc. is in discussions to go public via a merger with a Special-purpose acquisition company (SPAC), according to sources familiar with the matter. The move comes two years after Apollo took the Redwood City-based online photo products company private.
Shutterfly plans to go public through SPAC
Shutterfly joins a list of companies that have sought to go public in recent times through merges with SPACs or blank check companies, which raise funds in a public offering with plans to find a potential company to merge with. The company is in discussions with New York-based SPAC, Altimar Acquisition Corp II (NYSE:ATMR), in a potential deal valuing Shutterfly at $5 billion including debt. However, the transaction details are yet to be made public, and a potential deal could take according to the sources. There is no guarantee that the companies will reach an agreement, but should they do, it will make Shutterfly one of the several companies leveraging the recent explosion of SPACs deals.
Interestingly, Altimar went public last month and raised $345 million to put towards potential deals, which includes other funds the company raised privately. Last year, a previous vehicle, Altimar Acquisition Corp, reached an agreement to merge two investment firms talking them public in a deal valued at $12.5 billion, and this at the time was among the largest SPACs transaction.
Apollo acquired Shutterfly for $2.6 billion.
Established over two decades ago, Shutterfly was among the early firms that offered ways of getting books, gifts, and prints from digital photographs. The company has a digital printing segment for businesses and owns Lifetouch, which operates a portrait studio and does school photography. Notably, the company went public in 2006, and Apollo acquired it in 2019 at $2.6 billion including, debts. Apollo combined it with Snapfish LLC to create a bigger player in online photo services.
Before Shutterfly’s leveraged acquisition, its outlook was fading with online-photo services becoming omnipresent and competitors with enough resources such as Google Photos stealing market share. However, photo keepsakes demand has grown since COVID-19’s arrival almost a year ago making people nostalgic for special occasions such as graduations and weddings. According to the sources, when Apollo acquired Shutterfly, its revenue was flat and has now grown double digits.
SPACs growing in popularity among private equity firms
Over the past 14 months, there have been several SPAC IPOs, and more money raised than there have been in the entire financial vehicle’s history. This has added the allure take Shutterfly public with shares of e-commerce firms such as craft marketplace Etsy Inc. and pet-food retailer Chewy Inc. performing exceptionally. Equally, Shutterfly’s UK equivalent Moonpig Group PLC went public in February.
SPACs are offering private equity firms a streamlined way to an IPO for their portfolio entities. Several companies are considering going public via SPAC mergers as the frenzy takes hold on Wall Street. For instance, Carlyle Group Inc. is considering a SPAC deal with Syniverse Technologies LLC to turn around the investment’s fortunes.