Getty Images and Shutterstock Merge in A $3.7 Billion Deal

Getty Images Holdings and Shutterstock have entered into an agreement to combine both firms in a merger of equals transaction, creating a premier visual content company, which would have an enterprise value of approximately $3.7 billion.

The new entity will be named Getty Images Holdings, and will continue to trade on the New York Stock Exchange (NYSE). At the close of the deal, Getty Images shareholders will own approximately 54.7% and those of Shutterstock will own approximately 45.3% of the combined company on a fully diluted basis.

The new company will offer a content library with greater depth and breadth for the benefit of customers, expanded opportunities for its contributor community and a reinforced commitment to the adoption of inclusive and representative content.

Furthermore, the stronger financial profile of the combined company is expected to create increased capacity for product investment and innovation for customers in a fast-evolving and highly competitive environment.

Getty Images CEO Craig Peters said that the merger will unlock multiple opportunities to strengthen the financial foundation and invest in the future including enhancing their content offerings, expanding event coverage, and delivering new technologies to better serve our customers.

“With the rapid rise in demand for compelling visual content across industries, there has never been a better time for our two businesses to come together. By combining our complementary strengths, we can better address customer opportunities while delivering exceptional value to our partners, contributors, and stockholders,” he said.

Shutterstock CEO Paul Hennessy said that they expect the merger to produce value for the customers and stockholders of both companies by capitalising on attractive growth opportunities to drive combined revenues, accelerating product innovation, realising significant cost synergies and improving cash flow.

The merger will facilitate greater investment in innovative content creation, expanded event coverage, and customer-facing technologies and capabilities such as search, 3D imagery and generative AI.

It will also create a broader set of visual content products across still imagery, video, music, 3D and other asset types and result in expanded opportunities for content creators besides providing contributors substantially greater opportunities to reach customers around the world.

Significant Synergies

The deal drives expected run rate synergies across SG&A and CAPEX between $150 million and $200 million achieved within the first three years post-close, with approximately two-thirds expected to be delivered within the first twelve to twenty-four months.

It will generate revenue of between $1.98 billion and close to $1.94 billion, including 46% of subscription revenue Pre-synergy EBITDA of between $569 million and $574 million. The pre-synergy adjusted EBITDA less capital expenditures of between $461 million and $466 million.

Transaction Details

As part of the agreement, which was unanimously approved by the Boards of Directors of both companies, Shutterstock stockholders at close can elect to receive one either $28.84870 per share in cash for each share of Shutterstock common stock they own or 13.67237 shares of Getty Images common stock for each share of Shutterstock common stock they own; or a mixed consideration of 9.17 shares of Getty Images common stock plus $9.50 in cash for each share of Shutterstock common stock they own.

Shutterstock will, at the discretion of its Board of Directors, continue to declare and pay quarterly cash dividends, in accordance with its dividend policy, pending the close of the transaction.