Shutterfly financed the acquisition of the national leader in school photography with the proceeds of an $825 million incremental term loan facility. That loan closed simultaneous with the acquisition. Therefore, Shutterfly acquired the company cash-free and debt-free. “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 and 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, as well as realizing significant supply chain, manufacturing, and fulfillment synergies over time.”
Michael Meek will remain president and chief executive officer of Lifetouch. He will report to Christopher North.
Moreover, 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 them to participants. Generally, participants receive full payment for their ESOP interest in two installments. Following the expiration of applicable escrows as well as final approval of the IRS, the ESOP will be terminated.
Shutterfly expects the acquisition to result in approximately $935 million of additional net revenues and approximately $100 million of additional adjusted EBITDA in the twelve-month period following the closing.
The acquisition was announced January 30, 2018. It was approved by the board of directors of Shutterfly. The trustee of the Lifetouch ESOP also approved it prior to the announcement.