San Francisco-based private equity firm Hellman & Friedman will take private Getty Images, a creator and distributor of digital media, in a deal valued at $2.4 billion (€1.6 billion), including debt.
Barclays Capital, GE Commercial Finance and RBS Greenwich Capital have all committed financing for the transaction. The total enterprise value of the buyout is approximately $2 billion, consisting of roughly $1 billion of equity and $1 billion of debt, according to a source close to the deal.
The committed financing is not a requirement for the deal to close however. “There is no financing out,” said the source, referring to a financing condition that in some deals allows the sponsor to walk away if debt financing falls through. “[Hellman & Friedman] is obligated to close on the transaction whether or not the financing shows up.”
Getty stockholders will receive $34 per share, a 55 percent premium over the trading price on 18 January, the last trading day prior to the company announced that it was exploring “strategic alternatives”. The transaction is expected to close in the second quarter of 2008.
“Our board of directors has thoroughly evaluated strategic alternatives for Getty Images and has determined that this outcome is in the best interests of our stockholders,” said Getty co-founder and chief executive officer Jonathan Klein in a statement.
Parties including Getty Investments and co-founder Mark Getty, which hold a combined 15 percent of the company’s shares, have agreed to support the transaction and rollover their shares into Hellman & Friedman.
Hellman & Friedman seeks to “realise the full potential of its traditional businesses while furthering the evolution of Getty Images into a global digital media company”, according to managing director Andy Ballard also in a statement.
Newer business lines viewed by Hellman & Friedman as having growth potential include editorial and microstock, stated the previously mentioned source, pointing to Getting Images’ acquisitions of celebrity and entertainment photo service WireImage in February 2007 and of microstock company iStockphoto in 2006.
The firm is making the Getty investment from the Hellman & Friedman Capital Partners VI fund, closed last year, which has over $8 billion in committed capital.