Redwood City, Calif. – Shutterfly, the operator of a digital photobook publishing
service, announced on Tuesday that it has acquired Tiny Prints, which offers
on-demand printing of cards, invitations, stationery and photobooks.

Under the
terms, Shutterfly will pay $141 million in cash and 3.9 million shares for
Sunnyvale, Calif.-based Tiny Prints.

Tiny Prints stockholders will own
approximately 12% of the pro forma combined company.

Founded in 1999,
Shutterfly said it expects to generated $53-$55 million in revenues for its
quarter ending March 31, and a loss of $1-$2 million, up from previous guidance
of $52-$53 million.


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