Getty Images (NYSE: GETY) and Shutterstock (NYSE: SSTK), two leading visual content providers, have announced a merger agreement to form a combined entity valued at approximately $3.7 billion. Under the terms of the deal, Getty Images will pay about $28.85 in cash or roughly 13.67 Getty Images shares for each Shutterstock share. The new company will operate under the name Getty Images Holdings. Getty Images’ CEO, Craig Peters, will lead the merged organization, with a board comprising members from both companies, including Shutterstock’s CEO, Paul Hennessy.
This strategic merger aims to create a premier visual content company by combining the extensive image and video libraries of both firms. The consolidation is expected to generate significant cost synergies, estimated between $150 million to $200 million annually by the third year, and enhance earnings and cash flow by the second year. Additionally, the merger positions the new entity to better compete against the growing presence of AI-generated imagery in the market, enabling enhanced investment in content creation, 3D imagery, and generative AI technologies.
“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,” said Craig Peters, CEO, Getty Images in a press release statement.
“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,” added Paul Hennessy, CEO, Shutterstock in a press release statement.
The merger is subject to regulatory approvals, investor consent, and the refinancing of Getty’s debt. Upon completion, Getty Images shareholders will own approximately 54.7% of the combined company, while Shutterstock shareholders will hold about 45.3%. The combined company’s expected 2024 revenue is projected to be between $1.979 billion to $1.993 billion, with 46% anticipated from subscriptions. The merger is anticipated to enhance product offerings, drive revenue growth, accelerate innovation, and create a more robust platform to serve customers in the evolving visual content industry.
The news was well-received by Wall Street. Getty Images stock rose 25% to $3.20 a share. Shutterstock stock climbed 20% to $35.97 a share. Adobe stock fell nearly 2% to $423 a share in light of the merger creating a formidable competitor in the generative AI marketplace.
