VC-backed PhotoBox acquires Moonpig for £120m

Viktor Lundvall
25 July 2011

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PhotoBox, which is backed by a consortium of investors that include Highland Capital Partners, Index Ventures and HarbourVest, has acquired online greetings card retailer Moonpig.com for ТЃ120m.

The acquisition was funded by a combination of cash and shares, including fresh funding from Highland, Index, HarbourVest and new investors Insight Ventures, Quilvest Ventures and Greenspring Associates. The amount of fresh funding provided by the venture backers has not been disclosed. This transaction follows reports that PhotoBox is believed to be heading for the stock exchange. The acquisition of Moonpig allows PhotoBox to build scale in a growing market.

PhotoBox was backed initially in July 2005 by Index and Highland in a €24m series-A round. At the time it was known as Photoways and was based in France. The following year, UK-based PhotoBox merged with Photoways to create a €30m group by revenues. In July 2007, HarbourVest joined Index and Highland to provide a €10m series-B round for the business.

Debt
Barclays Bank and Royal Bank of Scotland provided senior credit facilities to support the transaction.

Company
Moonpig.com was founded in 1999 and launched its website in 2000. The company is an online retailer of personalised greetings cards. Based in London, the company has seen sales rise by 21% to £38m in the year ending April 2011. Until 2005 the company was making a loss, though in the year ending April 2010 it made net profits of £8m.

Photoways was founded in 1999 and went on to expand into 15 countries. PhotoBox was founded in 2000 in the UK. The company is a digital photo service provider and has seen sales rise by 30% in the last year. PhotoBox generated a turnover of £72m in 2010.

People
General partner Fergal Mullen and principal Irena Goldenberg were responsible for Highland's investment in PhotoBox. Pierre Chappaz, founder of Kelkoo, is chairman of PhotoBox's board and Stan Laurent, formerly chief operating officer at AOL Europe, is president and CEO.

Advisers
Company – Lazard (Corporate finance).
Target – Ingenious Corporate Finance (Corporate finance).