EXCLUSIVE: Shutterfly Could Be Up For Sale

NEW YORK (TheStreet) –– Several private equity firms, including the ones that competed to acquire Getty Images, have recently considered bids for online digital photo storage and conversion service Shutterfly (SFLY) and the company could be acquired in the second half of the year, according to people familiar with the situation.

One individual suggested the company could fetch in excess of $2 billion in a buyout.

These people did not rule out strategic bidders, but noted the company's stock performance is something that might make it more attractive to private equity bidders, which have been hard-pressed to put capital to work in the current deal cycle.

Getty Images was sold in a heated auction in 2012, after Hellman & Friedman dealt it to Carlyle Group, which had competition from several firms. That transaction valued Getty at more than $3 billion.

One source said private equity firm TPG Capital, which competed in the Getty bidding, had expressed preliminary interest in acquiring Shutterfly, and that it is likely that some of the other bidders for Getty would vie for the Redwood City, Calif.-based digital image company.

Other potential bidders suggested by another banker include Warburg Pincus and Silver Lake Partners.

Strategics are also likely to bid, another source said, pointing — surprisingly — to online property auction house Zillow (Z) as a possible buyer; Zillow hasn't been shy about deploying capital on deals this summer — it took out its biggest online competitor, Trulia Inc., in a $3.5 billion merger earlier this summer.

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