Getty Images, Shutterstock Surge On Confirmation Of $3.7B Merger: Retail Applauds The Move

Shares of Getty Images Holdings, Inc. ($GETY) and its New York-based rival Shutterstock, Inc. ($SSTK) surged in Tuesday’s pre-market trading after the creative and editorial visual content solutions providers confirmed rumors of a potential combination.

The companies said they have entered into a definitive merger agreement to combine in a union of equals, creating a premier visual company.

The combined company will have an enterprise value of $3.7 billion and be called Getty Images Holdings, Inc. Its stock will continue to trade on the New York Stock Exchange (NYSE) under the ticker symbol GETY.

Deal Terms

The terms of the agreement, approved by the boards of both companies, suggest Shutterstock shareholders can elect to receive either $28.85 per share in cash for each Shutterstock share they hold, or 13.67 Getty Images shares, or a combination of 9.17 Getty Images shares plus $9.50 in cash.

The aggregate consideration payable by Getty Images would be $331 million in cash and 319.4 million Getty Images stock. The election will be subject to proration. 

Following the transaction, Getty Images and Shutterstock shareholders would own 54.7% and 45.3% of the combined company, respectively.

Merger Synergies

Getty Images and Shutterstock said the combined company 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 the adoption of inclusive and representative content.”

Craig Peters, CEO of Getty Images, said the deal unlocks multiple opportunities to strengthen our financial foundation and invest in the future. These include enhancing its content offerings, expanding event coverage, and delivering new technologies to better serve customers.

Shutterstock CEO Paul Hennessy said, “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.”

The companies expect synergies across SG&A and Capex between $150 million and $200 million within the first three years following the closing of the transaction.

On a pro forma basis, the combined company’s pro forma 2024 revenue is between $1.98 billion and $1.99 billion, with 46% of it from subscriptions. Pre-synergy earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to be between $569 million and $574 million. 

Getty Images’ CEO Peters will serve as the CEO of the combined company, which will have an 11-member board comprising Peters, six directors designated by Getty Images and four directors designated by Shutterstock, including Hennessy. 

The deal's closing is contingent on the satisfaction of customary closing conditions, including the receipt of required regulatory approvals, the approval of shareholders of both companies, and the extension and refinancing of Getty Images’ existing debt obligations.

Retail Upbeat

On Stocktwits, retail sentiment toward Getty Images stock flipped to ‘bullish’ (61/100) from ‘bearish’ a day ago, with retail chatter growing louder to ‘extremely high’ levels.

GETY sentiment and message volume January 7, 2025, premarket as of 7:47 am ET | Source: Stocktwits

Retail lauded the announcement as “great news.”

Shutterstock also elicited a ‘bullish’ reaction (62/100) from retailers, with message volume rising to ‘high.’

SSTK sentiment and message volume January 7, 2025, premarket as of 7:47 am ET | Source: Stocktwits

When the rumors of a potential combination broke out in late trading on Friday, Getty Images stock gained 13.27%. It added another 7.53% on Monday. 

In premarket trading, Getty Images jumped 51.36% to $3.86 as of 7:47 a.m. ET, while Shutterstock stock gained 30.05% to $39.08.

Getty Images stock fell 59% in 2024, grossly underperforming the market, while Shutterstock declined about 36%.

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