Getty Images and Shutterstock to merge
Valuation put at $3.7 billion
Getty Images Holdings and Shutterstock will merge in a transaction valued at approximately $3.7 billion. The merger will create a new powerhouse in the visual content market under Getty Images Holdings. The combined company will continue trading on the New York Stock Exchange with the “GETY.”
By joining forces, Getty Images and Shutterstock aim to create a deeper and more expansive content library to serve a diverse and growing global customer base. The merger will enhance contributor opportunities while strengthening the company’s commitment to inclusive and representative content.
In addition, the combined entity’s financial strength will provide greater flexibility for investing in product innovation and responding to customers’ evolving needs in a highly competitive marketplace.
Craig Peters, CEO of Getty Images, said, “This merger unlocks numerous opportunities to fortify our financial base and position ourselves for future growth. We plan to expand our content offerings, increase event coverage, and invest in new technologies to serve our customers better.”
He added, “With the increasing demand for high-quality visual content across various industries, the time is right for us to combine our complementary strengths.”
Paul Hennessy, CEO of Shutterstock, added, “We are excited by the opportunity to enhance our content offering and meet the diverse needs of our customers. The merger will create substantial value for our customers and stockholders through expanded revenue potential, accelerated product innovation, and improved cost efficiencies.”
Merger goals
The strategic advantages of the merger are clear. The combined company will benefit from increased investment in cutting-edge technologies such as 3D imagery and generative AI and improvements in search functionalities. The merger also promises to create a broader portfolio of visual content, including still images, videos, music, and 3D assets. This expanded offering will allow content creators to reach a wider audience and increase their growth opportunities.
Additionally, the merger is expected to strengthen the combined company’s financial position significantly. By improving cash flow and reducing debt, the new entity will be better positioned to reinvest in future growth while delivering value to its stakeholders. The companies anticipate realising run-rate synergies between $150 million and $200 million over the first three years after the close, with most of these savings expected to materialise within the first 12 to 24 months.
From a financial perspective, the merger creates an attractive company profile. Pro forma revenue for 2024 is projected to fall between $1.979 billion and $1.993 billion, with a significant portion coming from subscription-based revenue. The pre-synergy EBITDA is estimated to be between $569 million and $574 million, and pre-synergy adjusted EBITDA after capital expenditures are expected to be between $461 million and $466 million.
Governance of the new company will see Craig Peters continue as CEO. At the same time, the Board of Directors will comprise 11 members, including six representatives from Getty Images and four from Shutterstock, including Hennessy, who will join as a director. Mark Getty, current Chairman of Getty Images, will assume the board’s Chairman role for the combined entity.
Under the merger agreement’s terms, Shutterstock’s stockholders will have several options for their shares. They can receive $28.85 in cash per share, 13.67237 shares of Getty Images stock for each share of Shutterstock stock, or a mixed consideration comprising both cash and stock. At closing, Getty Images stockholders will hold approximately 54.7% of the new company, with Shutterstock stockholders owning the remaining 45.3%.
The merger is subject to regulatory approvals, stockholder approval from both companies and the extension or refinancing of Getty Images’ existing debt obligations. Once completed, Shutterstock stockholders will have the option to continue receiving quarterly cash dividends, depending on the decision of its board of directors.
Getty Images has engaged Berenson & Company as its lead financial advisor for advisory support, and J.P. Morgan Securities also provides financial advice. Skadden, Arps, Slate, Meagher & Flom serves as Getty Images’ legal advisor. Shutterstock has retained Allen & Company as its exclusive financial advisor, and White & Case is its legal counsel.
The merger marks a significant milestone in consolidating the visual content industry. Getty Images and Shutterstock will use their combined resources to offer customers a more comprehensive and innovative service across various sectors.
Image: The merger will create a new powerhouse in the visual content market under Getty Images Holdings. Credit: Getty Images
