(Reuters) - Private equity firm Apollo Global Management LLC said on Monday it had agreed to acquire U.S. digital imaging company Shutterfly Inc for $2.7 billion, including the company’s $900 million debt.

Leon Black, Chairman, CEO and Director, Apollo Global Management, LLC, speaks at the Milken Institute's 21st Global Conference in Beverly Hills, California, U.S. May 1, 2018. REUTERS/Lucy Nicholson

The deal, first reported by Reuters on Monday, is the culmination of several years of private equity interest in Shutterfly, which allows customers to make photo books, cards and gifts from their photos.

Its business has become increasingly commoditized and competitive, forcing it to explore a sale.

Apollo said it would pay $51 per share in cash for Shutterfly, a 13% premium to the company’s value on Feb. 5, the last trading day before it announced it would explore a sale.

Apollo also announced it would acquire privately held Snapfish LLC, a small internet-based retailer of photography products, to merge it with Shutterfly.

Headquartered in Redwood City, California, Shutterfly makes personalized consumer photo products such as photo books, holiday cards, invitations and stationary.

Founded in 1999, Shutterfly faces increasing competition from other online digital photography services companies such as Snapfish and Vistaprint, as well as brick-and-mortar retailers, such as Wal-Mart, Costco and Target, that offer low-cost digital photography products and services.

Shutterfly was approached by several buyout firms over the years about a deal, including by Thomas H. Lee in 2016 and Silver Lake Partners LP in 2014, Reuters has previously reported.

In February, Shutterfly said its board had formed a committee to explore its options with the help of investment bank Morgan Stanley after receiving acquisition interest from an undisclosed party. The company also announced that its Chief Executive Christopher North would leave the company in August.

Shutterfly last year acquired privately held Lifetouch, which helps schools and families shoot professional photos, for $825 million in cash.