With the media’s inevitable shift from print to online imagery products, demand for the latter has ballooned incredibly over the past few years. Carlyle Group LP (NASDAQ:CG) is banking on this swelling demand, as it has agreed to buy Getty Images Inc from Hellman & Friedman.
The buy will be valued at $3.3 billion, reports Reuters.
William Conway, Carlyle CEO, revealed last week that the private equity firm had invested $1 billion in the second quarter, citing that he intends to spend an additional sum amounting to $1.6 billion, or more, by the end of the year.
Through this deal, Carlyle Group LP (NASDAQ:CG) will engage in a partnership with Getty’s top level management, and in doing so command a controlling stake. The remaining share of the stake will go to Getty’s co-founders.
Getty’s is the largest supplier of video and stock photos, among other digital content. Founded in 1995 by Klein and Mark Getty, the company will be a wise addition to Carlyle’s portfolio, as its service package is designed for the needs of the contemporary media industry.
Interestingly, Mark Getty’s family has also been dragged into the deal. Along with Mark, the Getty family has also made it clear that it will invest most of its ownership interests into the deal. Klein, the CEO, will also invest equity.
While Mark Getty is the co-founder, and Klein the CEO, the two sit on a somewhat crowded table, after they sold a majority stake of the company to Hellman & Friedman more than four years back. At the time, Hellman & Friedman were compelled to fork out $2.4 billion.
This deal came at the right time and will give Getty Images a huge edge in its space. This particular change of private equities is not only beneficial to finances, but also comes at a time when imagery products have dominated the media industry.
JPMorgan Chase & Co. (NYSE:JPM) and Goldman Sachs Group, Inc. (NYSE:GS) even gave Getty the green light and advised them to take the deal.
The overwhelming number of bidders on the deal represents the lucrative nature of the opportunity. Sources even reveal that CVC capital was one of the bidders on the auction. Fortunately for Carlyle Group LP (NASDAQ:CG), it managed to trample on CVC and other bidders.
As fears of Initial Public Offerings continue to build, the appetite for secondary buyouts increasingly surges. More and more investors are opting for secondary buyouts, exclaiming the abundance of ready capital in the industry.
This story is actually an outgrowth of yesterday’s news, where two people familiar with the deal noted that the two companies would probably make the agreement announcement today.