| NEW YORK
NEW YORK Private equity firm Silver Lake is in advanced talks to acquire online photo-sharing service Shutterfly Inc for at least $2 billion, people familiar with the matter said on Monday.
Silver Lake has outbid other buyout firms in an auction for Shutterfly and is now negotiating the terms of an acquisition, the sources said. They cautioned that the talks might not lead to a deal, given Shutterfly's high expectations for a sale price.
Silver Lake is in discussions to pay more than $50 per share for Shutterfly, although the deal price is not yet final, one of the sources said.
Shares of Shutterfly, which closed Friday at $47.52, were up 5.1 percent at $49.93 in afternoon trading on Monday.
The sources requested anonymity because the negotiations are confidential. Silver Lake and Shutterfly declined to comment.
Based in Redwood City, California, Shutterfly allows customers to use their photographs to make books, cards and gifts. It competes with Hewlett-Packard Co's Snapfish service, which Reuters reported earlier this month is also up for sale.
Shutterfly hired boutique investment bank Qatalyst Partners LLC to explore strategic alternatives earlier this year amid increasing competition in its market, people familiar with the matter previously said.
If Silver Lake acquires Shutterfly, this would be the first major U.S. deal for buyout firms in the sector since Carlyle Group LP's acquisition of photo agency Getty Images from Hellman & Friedman LLC in October 2012 for $3.3 billion, including debt.
Silver Lake is a technology-focused private equity firm with more than $23 billion in assets under management. Among its acquisitions are computer maker Dell Inc and talent agency IMG Worldwide.
(Reporting by Nadia Damouni and Greg Roumeliotis in New York; Editing by Alden Bentley and Lisa Von Ahn)