Deals and IPOs

Getty Images to Go Private in $2 Billion Buyout


Getty Images agreed to a takeover bid of about $2 billion from Hellman & Friedman, putting the struggling photo and video supplier in the hands of a private equity firm.

The deal comes about five weeks at Getty said it would look at strategic alternatives and is worth $34 a share for stockholders, or a premium of about 55 percent over its closing price on Jan. 18, when it made the announcement that it had hired Goldman Sachs and could be up for sale.

Getty's board has approved the takeover, and the deal is expected to close in the second quarter. Including debt, it is worth $2.4 billion.

Getty's decision to put itself in the hands of private equity follows 12 months in which its shares have dropped around 50 percent and it has faced a slowdown at its core rights-managed pictures business.

The company has said the shift of advertising to the Internet and the growth of text-only paid-search advertisements are creating a decline in volume for its rights-managed still pictures used in magazine and newspaper advertisements.

To offset slowing revenue growth, the Seattle-based company has cut jobs and consolidated offices. For the fourth-quarter net profit fell 7.8 percent to $28.5 million, or 48 cents per diluted share, based on 59.8 million diluted shares.

The deal also comes amid a broader slowdown in mergers and acquisitions. But while the credit crunch has sidelined the mega-deals that defined much of the buyout boom that peaked last year, private equity firms have recently been active with more modest buyouts.

Last week private equity firm First Reserve said it was buying CHC Helicopter, which provides services to the offshore oil and gas industry, for C$3.7 billion, including assumed debt -- in what it called the largest-ever buyout in the oilfield services industry.

As for the Getty deal, financing commitments have been provided by Barclays Capital, GE Commercial Finance and RBS Greenwich Capital. While shareholders still must vote on the deal, Getty Investments and others, including the co-founder Mark Getty, who together own 15 percent of the company, have agreed to the deal.