November 8, 2010, 1:07 PM

Shutterfly buys a web-based commercial printer

WMSG was acquired for $6 million in cash.

Bill Briggs

Senior Editor

Lead Photo

Shutterfly Inc. announced today that it has acquired certain assets and liabilities of WMSG Inc. for $6 million in cash. Dallas-based WMSG is a privately held, digital direct marketing specialist that specializes in print-on-demand and is expected to bolster Shutterfly’s commercial business capabilities, the company says.

“We’re excited to combine WMSG’s data management and marketing analytics capabilities with Shutterfly’s state-of-the-art manufacturing resources,” says Jeffrey Housenbold, president and CEO of the photo printing and custom merchandise e-retailer. The acquisition is expected to benefit Shutterfly’s existing commercial clients and drive growth in that market, he says.

Shutterfly is No. 67 in the Internet Retailer Top 500 Guide.

WMSG president Jim Liszewski will join Shutterfly and lead the commercial print initiative reporting to Dwayne Black, senior vice president of operations. WMSG began operations in 2005 and its clients include Toyota and Dell Inc., No. 3 in the Top 500 Guide.

The transaction, which closed on Nov. 5, was structured as an asset purchase. The transaction will not have a material impact on Shutterfly’s net revenue, results of operations or cash flow for the quarter ending Dec. 31, 2010, Shutterfly says.

For the third quarter ended Sept. 30, Shutterfly reported:

  • Sales were $49 million, up by 21% year-over-year from $40.5 million.
  • Net loss was $4.8 million, compared to a net loss of $6.3 million in the third quarter of 2009.

For the first nine months of fiscal 2010, the e-retailer reported:

  • Sales of $141.5 million, a 22.7% increase from $115.3 million in the prior year period.
  • Net loss was $15.3 million compared with $18.2 million in 2009.

Shutterfly projects fourth quarter sales to range from $148.5 million to $153.5 million, a year-over-year increase of 13% to 17%, and full-year revenue between $290 million and $295 million, an increase of 18% to 20% compared with 2009.

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