Shutterfly Inc., which turns digital photos into printed albums, is working with boutique investment bank Qatalyst Partners to find buyers for the company, according to people familiar with the matter.
Preparations are at an early stage and may not lead to a transaction, the people said, asking not to be identified discussing a private matter. Potential acquirers include private-equity firms as well as e-commerce and web storage companies, they said.
Shutterfly’s shares jumped as much as 16 percent, and were at $50 each as of 9:31 a.m. in New York today, giving the Redwood City, California-based company a market value of about $1.9 billion. Through yesterday, the shares had declined 24 percent in the past year.
Deal making is picking up in the technology, media, and telecommunications sector as large companies such as Google Inc. and Facebook Inc. put cash reserves to work. Google this week agreed to buy Songza, a mobile application that provides tailored music play-lists to users, for an undisclosed sum.
Shutterfly allows customers to print photos onto items like mugs, pillows, and iPad cases. Through other brands, Shutterfly also sells customized wedding invitations and stationery online.
The company has been boosting sales at the expense of profits. First-quarter revenue climbed 17 percent to $137 million from a year earlier, while the net loss widened to $34.2 million from $12.4 million. This year, the company may post the first annual net loss since its 2006 initial public offering, according to estimates compiled by Bloomberg.
Shutterfly has made several acquisitions. In 2013, the company bought MyPublisher, a company that develops photo-book software, and ThisLife, a cloud-based photo and video service. In 2012, the company bought mobile-application developer Penguin Digital Inc., and in 2011, picked up Tiny Prints.
Gretchen Sloan, a spokeswoman for Shutterfly, didn’t immediately respond to a request made outside regular business hours, and neither did Sally Palmer, a spokeswoman for Qatalyst.
Additional reporting contributed by Allison Collins
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