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NEW YORK: Getty Images, the biggest distributor of pictures and video in the world, agreed Monday to sell itself to the private equity firm Hellman Friedman for $2.4 billion, including debt.
The price, based on a bid of $34 a share, represents a 55 percent premium over the company's share price on Jan. 18, the day before it announced it was "exploring strategic options." Hellman Friedman's offer is 39 percent higher than Getty's closing stock price Friday of $24.45.
Getty also owns istockphoto.com, a popular royalty-free image site with prices far below those at the flagship site.
Most likely the majority of funds are not theirs. They will load it up with debt, and pay themselves consulting services in 10s of millions of $ per year. It'll take them a couple of years to return their own money. After that it is a free ride, even if it is into the ground.
Private equity is not all it's drummed up to be.
"The smart money is betting that private equity will be a big source of corporate bankruptcies" (not mine)
While it seems like lunacy to sell images for a few dollars, at least if you normally charge hundreds, there's an important market niche there. When images are cheap, it's easy to stick them in blog posts, PowerPoint presentations, web site content pages that couldn't possibly justify a costly image, etc.
Their pricing has been creeping up, and I can imagine a financially oriented buyer killing the golden goose by raising prices even higher.