STRUGGLING PHOTO and video supplier Getty Images has agreed to a takeover bid of $2.1 billion (€1.4 billion) from private equity firm Hellman & Friedman.
The deal, which comes about five weeks after Getty said it would look at strategic alternatives, is worth $34 (€23) a share to stockholders. That is a premium of 55 per cent over Getty's closing price on January 18th, when it announced that it had hired Goldman Sachs as an adviser 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 Getty debt being assumed by the buyer, the deal is worth $2.4 billion.
In April 2006 Getty Images acquired the Kerry-based Stockbyte photographic image company in a $135 million deal. The Kerry firm had been founded by Jerry Kennelly 10 years previously and Mr Kennelly and his wife, Johanna, were the main beneficiaries of the deal.
Getty's decision follows 12 months in which its shares have dropped 50 per cent and it has faced a slowdown at its core rights-managed pictures business.
Getty, based in Seattle, was built through a series of acquisitions of stock photography houses in the 1990s, and began supplying media companies with pictures to use in adverts and magazines. It also began selling news, sports and entertainment photos and video.
But a shift of advertising to the internet and the growth of text-only paid-search advertisements led to a decline in volume for Getty's rights-managed still pictures. Getty also faced competition from discount Web sites offering pictures.
To offset slowing revenue growth, the company cut jobs and consolidated offices. For the fourth quarter, net profit fell 7.8 per cent to $28.5 million, or 48 cents per share.The deal with Hellman & Friedman also comes amid a broader slowdown in mergers and acquisitions because of troubles in the credit markets.
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 produced more modest transactions.
(- Reuters)
