Getty Images is for sale and its going for big numbers. Hit the jump for details on the Getty Images auction.
The auction for a potential sale of Getty Images Inc. has progressed to the second round, with several private-equity firms putting in initial bids of around $4 billion, people familiar with the matter said.
Buyout firms KKR KKR +1.06% & Co. and TPG are among at least five bidders that remain interested in privately-owned Getty, these people said. The Seattle-based photo agency distributes stock photographs, video footage and digital images to media and other organizations around the world.
Getty’s owners and bankers are now making management presentations to potential buyers, ahead of the second round of bids, the deadline for which hasn’t been set, the people said.
The buyout firm Hellman & Friedman took Getty private in 2008 in a leveraged buyout that valued the company at $2.4 billion. A group of investors including Getty’s co-founder and chairman Mark Getty owns a minority stake in the company; the group is expected to roll over its investment and strike a new agreement with the next private-equity owner, according to the people familiar with the matter.
Although Getty is considering a potential initial public offering in addition to a sale, the IPO plans are on the back burner, given the level of interest in the company, the people said.
A spokeswoman for Getty didn’t immediately comment.
At around $4 billion, a Getty deal would be among the larger private-equity transactions this year. Investment bankers say credit is available at reasonable interest rates, but buyout firms still need to put up around 30% of a deal’s value in cash, which limits their ability to pursue very large deals. Unlike during the boom years before the financial crisis, private-equity firms are partnering less and less with each other, which also limits their ability to chase deals above $5 billion.
A private-equity buyer would have to put up at least $1 billion in equity to buy Getty, but these firms feel confident about Getty’s business, which is stable and brings in regular cash flow, one of the people familiar with the matter said. Some of the buyout firms are also considering bringing in investors in their funds, known as limited partners, to put up money directly for the deal, another person said.
Mr. Getty and Chief Executive Officer Jonathan Klein co-founded Getty in 1995 to distribute stock photos and other visual content online, just as Internet use was taking off globally. The company has grown through acquisitions and employs roughly 1,900 people.
