Getty Images/Shutterstock to merge

Getty Images Holdings, Inc. and Shutterstock announced that the two stock-content giants entered a definitive merger agreement. The combined company, which would have an enterprise value of approximately $3.7 billion, will be named Getty Images Holdings, Inc. and continue trading on the New York Stock Exchange under the ticker symbol “GETY”.

As a combined company, Getty Images and Shutterstock 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 adopting 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.

Under the terms of the agreement, Shutterstock stockholders at close can elect to receive one of the following:

1. $28.84870 per share in cash for each share of Shutterstock common stock they own;
2. 13.67237 shares of Getty Images common stock for each share of Shutterstock common stock they own; or
3. 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 shareholder elections at close are subject to proration to ensure the aggregate consideration payable by Getty Images consists of $9.50 in cash per Shutterstock share as of immediately before close and 9.17 shares of Getty Images stock per Shutterstock share as immediately before close.

Based on the common shares outstanding, the aggregate consideration payable by Getty Images would consist of $331 million in cash and 319.4 million shares of Getty Images stock. At close, Getty Images stockholders will own approximately 54.7% and Shutterstock stockholders will own approximately 45.3% of the combined company on a fully diluted basis.

“Today’s announcement is exciting and transformational for our companies, unlocking multiple opportunities to strengthen our financial foundation and invest in the future—including enhancing our content offerings, expanding event coverage, and delivering new technologies to better serve our customers,” said Craig Peters, CEO, Getty Images. “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.”

“We are excited by the opportunities we see to expand our creative content library and enhance our product offering to meet diverse customer needs,” said Paul Hennessy, CEO, Shutterstock. “We expect the merger to produce value for the customers and stockholders of both companies by capitalizing on attractive growth opportunities to drive combined revenues, accelerating product innovation, realizing significant cost synergies and improving cash flow. We look forward to working closely with the Getty Images management team to complete the transaction and drive the next chapter of growth.”

Strategic and Financial Benefits

• Facilitates greater investment in innovative content creation, expanded event coverage, and customer-facing technologies and capabilities such as search, 3D imagery, and generative AI.
• Creates a broader set of visual content products across still imagery, video, music, 3D and other asset types.
• Provides contributors substantially greater opportunities to reach customers around the world.
• By deleveraging the combined balance sheet through the transaction and driving more robust cash flow, the combined company will be well positioned to accelerate debt repayment, reduce borrowing costs, and capitalize on new opportunities to create value for customers and stockholders.
• 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
• On a pro forma 2024 basis, the combined company would have an attractive financial profile:
  • Revenue of between $1,979 million and $1,993 million, including 46% of subscription revenue
  • Pre-synergy EBITDA of between $569 million and $574 million
  • Pre-synergy Adjusted EBITDA less capital expenditures of between $461 million and $466 million
  • Pre-synergy net leverage of 3.0x pro forma 2024 pre-synergy EBITDA

At close, Peters will serve as CEO of the combined company, which will will have an eleven-member board of directors, comprised of Peters, six directors designated by Getty Images, and four directors designated by Shutterstock, including Hennessy. The chairman of the board of directors will be Mark Getty, currently chairman of Getty Images.