S&P might lower Shutterfly

S&P said it placed its ratings, including the BB- corporate credit rating, on Shutterfly Inc. on CreditWatch with negative implications.

The agency said the CreditWatch placement reflects Shutterfly's announcement that it has entered into a definitive agreement to acquire Lifetouch Inc. for about $825 million.

S&P said it expects the acquisition will increase adjusted debt leverage to about 3.8x, which is above the 3.0x threshold for the BB- corporate credit rating.

The agency said it will resolve the CreditWatch placement within the next 90 days once it has more details on the acquisition, including synergies, business position, diversification, profitability, the combined company's cash flow generation and the company's wiliness to repay debt.

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