Picture Perfect deal for Online Retail

April 2006

The team behind leading UK online digital photo printing business, PhotoBox, have achieved their goal of consolidating this exciting sector in an unexpected manner – in a $55m merger with leading French group Photoways, and in doing so have created Europe’s largest online digital photography business.

PhotoBox was the first purely online digital photography company in the UK when it was launched in 2000, rapidly becoming the market leader in online photo sharing, storing and printing.

Late last year, Photobox’s founders Mark Chapman and Graham Hobson, approached Livingstone to help them acquire a potential target that would allow them to expand their operation into mainland Europe and fast forward their vision of consolidating this rapidly growing market.

However, Mark and Graham were not alone in their lofty ambitions and the team at leading French operator Photoways, backed by private equity houses Highland Capital Partners and Index Ventures, soon got in touch to see if the two teams could work together.

The subsequent transaction, negotiated by Livingstone, sees Messrs Chapman and Hobson retain their involvement with the new company, Europe’s biggest online photo service with sales of more than $35 million in 2006.

Livingstone’s Graham Carberry, says: “Because Mark and Graham were taking equity in the ongoing business, two-way financial due diligence and relative valuation work was necessary. It was a tricky process and at times we and the client had to juggle a number of issues but the transaction was completed successfully and in a spirit of cooperation which will stand the merged team in great stead going forward.”

Under the deal Mr Chapman becomes UK Managing Director and takes a seat on the board of the enlarged group while Mr Hobson becomes Group Chief Technical Officer.

Mr Chapman says "In what turned out to be a complex transaction, the team at Livingstone never failed to give us the highest level of support and advice as we sought a successful outcome. We are certain that the deal has delivered both a great return for our original investors, and put the enlarged group in pole position to dominate a fast-growing European market.”

Tim Lyle, Partner
Tel: 020 7484 4710
Email: tlyle@livingstonepartners.co.uk

Graham Carberry, Deal Leader
Tel: 020 7484 4728
Email: gcarberry@livingstonepartners.co.uk