Author Topic: H&F presses on with $4 billion Getty Images sale (Read 31242 times)

Caz · « **Reply #25 on:** July 06, 2012, 06:01 »

Quote from: SNP on July 04, 2012, 15:45

....though KKR seems a better run than H&F, it freaks me out that they've invested in Fotolia.

Me too. I find the the most worrying thing of all

noodle · « **Reply #26 on:** July 06, 2012, 06:28 »

The industry needs a good house cleaning....
and all to the blame goes on these greedy hedge funds and investment houses, the brokers of which should be in jail for bilking money from little investors - in this case its the photographers that contribute to Getty.

Pyramid schemes are illegal per se but as someone aptly entioned, this is what iit is essentially, and we are the suckers on the bottom...

bunhill · « **Reply #27 on:** July 28, 2012, 07:46 »

Carlyle, CVC, TPG weigh final bids for Getty - Reuters

Quote

Three private equity firms, including Carlyle Group LP (CG.O) and CVC Capital Partners CVC.UL, are weighing final bids for Getty Images, as the auction of the digital media company enters its last leg, according to people familiar with the matter.

TPG Capital TPG.UL also remains in the auction and is considering a final bid for Getty, the people said. The largest supplier of stock photos, video and other digital content could be valued at as much as $4 billion, they said.

Final bids for Getty Images are due on August 6, they added.

Other buyout firms that had earlier taken a look, such as KKR & Co (KKR.N) and Charterhouse CHCAP.UL, have dropped out of the process, the people said.

A sale would come more than four years after private equity firm Hellman & Friedman LLC bought a majority stake in Getty in a $2.4 billion deal.

I wonder who people familiar with the matter actually are.

Mantis · « **Reply #28 on:** July 28, 2012, 07:54 »

Quote from: bhr on July 28, 2012, 07:46

Carlyle, CVC, TPG weigh final bids for Getty - Reuters

Quote
Three private equity firms, including Carlyle Group LP (CG.O) and CVC Capital Partners CVC.UL, are weighing final bids for Getty Images, as the auction of the digital media company enters its last leg, according to people familiar with the matter.

TPG Capital TPG.UL also remains in the auction and is considering a final bid for Getty, the people said. The largest supplier of stock photos, video and other digital content could be valued at as much as $4 billion, they said.

Final bids for Getty Images are due on August 6, they added.

Other buyout firms that had earlier taken a look, such as KKR & Co (KKR.N) and Charterhouse CHCAP.UL, have dropped out of the process, the people said.

A sale would come more than four years after private equity firm Hellman & Friedman LLC bought a majority stake in Getty in a $2.4 billion deal.

I wonder who people familiar with the matter actually are.

The sad thing is that it's another equity firm who will likely acquire them. With all the debt Getty has resulting from the H&F leaches, another private equity firm isn't going to sit back and say, "lets nurture our contributors since they are part of the backbone of this business". They are going to say, "we want our money and we want it now and in this volume." It will use simple business principles: cut commissions and raise prices........AGAIN. For Getty/IS, the RC system was a brilliant move since it is a living, breathing, expanding, contracting target.

cathyslife · « **Reply #29 on:** July 28, 2012, 07:56 »

Quote from: bhr on July 28, 2012, 07:46

I wonder who people familiar with the matter actually are.

Getty?

Sadstock · « **Reply #30 on:** July 28, 2012, 09:13 »

Note that "Other buyout firms that had earlier taken a look, such as KKR & Co (KKR.N) and Charterhouse CHCAP.UL, have dropped out of the process, the people said."

If KKR, who purchased 50% of FT in May for $150 million (and convinced some banks to lend FT $150 million more) http://www.microstockgroup.com/fotolia-com/fotolia-sells-50-stake-in-business/, has passed, then I can't see anyone paying $4 billion.

Being the owner of FT, KKR is clearly interested in the industry, but I think also understands the financials and has realized that what H&F is asking for a mortgaged Getty is ridiculous.

Here is another article.
http://www.nasdaq.com/article/private-equity-firms-vying-for-getty-images-as-final-bids-are-due-on-august-6-20120728-00001

Lagereek · « **Reply #31 on:** July 28, 2012, 23:26 »

I dont want to see them go, but if they do, there will be no escape route for photographers. Slowly the industry, as we know it will die out and left will be nothing but little hole in the wall outfits, not even worth bothering with.

oxman · « **Reply #32 on:** July 28, 2012, 23:40 »

Quote from: Mantis on July 28, 2012, 07:54

Quote from: bhr on July 28, 2012, 07:46
Carlyle, CVC, TPG weigh final bids for Getty - Reuters

Quote
Three private equity firms, including Carlyle Group LP (CG.O) and CVC Capital Partners CVC.UL, are weighing final bids for Getty Images, as the auction of the digital media company enters its last leg, according to people familiar with the matter.

TPG Capital TPG.UL also remains in the auction and is considering a final bid for Getty, the people said. The largest supplier of stock photos, video and other digital content could be valued at as much as $4 billion, they said.

Final bids for Getty Images are due on August 6, they added.

Other buyout firms that had earlier taken a look, such as KKR & Co (KKR.N) and Charterhouse CHCAP.UL, have dropped out of the process, the people said.

A sale would come more than four years after private equity firm Hellman & Friedman LLC bought a majority stake in Getty in a $2.4 billion deal.

I wonder who people familiar with the matter actually are.

The sad thing is that it's another equity firm who will likely acquire them. With all the debt Getty has resulting from the H&F leaches, another private equity firm isn't going to sit back and say, "lets nurture our contributors since they are part of the backbone of this business". They are going to say, "we want our money and we want it now and in this volume." It will use simple business principles: cut commissions and raise prices........AGAIN. For Getty/IS, the RC system was a brilliant move since it is a living, breathing, expanding, contracting target.

And this is why, I believe, we have not seen our 2012 RC levels. They will let the new buyers deal with that. I am hoping the new owners do not impose the 20% for all like the Getty main collection. But with Getty's debt load and investors squeezing them dry -- who knows.

On the other hand, there will always be millions of buyers for low cost images and great portfolios will sell well even if they have to move around to where the buyers migrate to.

ffNixx · « **Reply #33 on:** July 29, 2012, 02:19 »

Quote from: oxman on July 28, 2012, 23:40

... I am hoping the new owners do not impose the 20% for all like the Getty main collection. But with Getty's debt load and investors squeezing them dry -- who knows.

The new RC levels may be quite brutal, but I don't see why Getty would go down to 20% for all. It would make no sense as it would either end exclusivity or end Getty's participation in microstock. I don't see it happening, iStock would die without exclusives.

lisafx · « **Reply #34 on:** July 29, 2012, 14:12 »

Quote from: oxman on July 28, 2012, 23:40

And this is why, I believe, we have not seen our 2012 RC levels. They will let the new buyers deal with that. I am hoping the new owners do not impose the 20% for all like the Getty main collection.

I don't think this would happen for the reasons ffNixx states above. But if it did happen, I would have mixed feelings. After all, 20% would actually be a raise for non-exclusives.

RacePhoto · « **Reply #35 on:** July 30, 2012, 00:08 »

Quote from: lisafx on July 29, 2012, 14:12

Quote from: oxman on July 28, 2012, 23:40

And this is why, I believe, we have not seen our 2012 RC levels. They will let the new buyers deal with that. I am hoping the new owners do not impose the 20% for all like the Getty main collection.

I don't think this would happen for the reasons ffNixx states above. But if it did happen, I would have mixed feelings. After all, 20% would actually be a raise for non-exclusives.

Yes, it would be a 5% raise for me, a bottom feeding, indy.

Someone help me out here. Income for Getty comes from many sources. What percentage comes from IS only (us) and what comes from the rest? It seems to me that people are looking at this from a Microstock perspective when there are some bigger assets involved, the Getty news service, the Getty archives, and what else? How important is IS in the future and the value?

This is OLD DATA: but take a look at RF anyway.

Portfolio      2004 2005 2006
RM still imagery   33%   33%   34%
RF still imagery   24%   20%   16%
Editorial Imagery   18%   22%   26%
Footage     28%   29%   28%

"Getty Images was sold to a private equity firm Hellman & Friedman for $ 2.4 Billion at a 55% premium of their January 18 share price."

http://www.wikinvest.com/stock/Getty_Images_%28GYI%29

djpadavona · « **Reply #36 on:** July 30, 2012, 07:42 »

Quote from: ffNixx on July 04, 2012, 02:36

Quick search on debt-to-EBITDA leads here:

http://www.readyratios.com/reference/debt/debt_ebitda_ratio.html

"Ratios higher than 4 or 5 usually set off alarms because they indicate that a company is likely to face difficulties in handling its debt burden, and thus is less likely to be able to raise additional loans required to grow and expand the business."

Just think of it in terms of your own income situation. If your outstanding loans (mortgage, auto, school, credit card debt, etc) are 4 to 5 times your base pay before taxes, you can imagine how difficult it will be to pay off those loans and still have money for the basic necessities of life. Studies show that 4x-5x is the critical threshold, but even 2x puts a normal family in a world of hurt.

djpadavona · « **Reply #37 on:** July 30, 2012, 07:48 »

Quote from: sharpshot on July 04, 2012, 17:01

Quote from: Karimala on July 04, 2012, 14:17
Quote from: Mantis on July 04, 2012, 08:10
Bottom line, I don't want Getty/Istock to fail. I make too much money there...still. But I fear Joan and a few others are right when they say that another venture capitalist group = vulture capitalist and we will once again see a pruning of our commissions....something along the same line of what has already happened. If Getty believes in themselves so much, then buy themselves and go private again.

I don't want to see Getty and iStock fail either, even though I'm almost done pulling my portfolio from IS. Why? Because...where are all those photographers going to go to sell their stock images? To smaller traditional agencies? To the micros? Both? Either way, we would all of a sudden be faced with a flash flood of competitors looking for new outlets to sell their stock imagery...and then BOOM...our earnings suddenly drop. Losing Getty and iStock is bad news for all photographers!
I agree about the extra competition but the other sites would also be flooded with new buyers from Getty/istock, so I don't think it would be such a bad thing. I don't think it will happen though, it's about as likely as FT raising commissions.

I agree with Sharpshot. If the worst case scenario were to happen, I seriously doubt the entire customer base would throw up its hands and say, "Welp, I guess we can't buy stock photos anymore." No, they would just move on to other agencies. And if those agencies pay higher than a 15 to 20% commission to its artists, I'm not seeing how this would be a loss for contributors.

DeStock · « **Reply #38 on:** July 30, 2012, 09:26 »

I would say this is good news for everyone in the industry. If a few equity firms are competing to purchase Getty at $ 4 billion, that means they see a strong potential for growth in the next 5 years ( usual time they take to spin around and resale). Combined with the investment of $150 million in Fotolia, it confirms that big investors see a growth in the image licensing market.
With companies like Instagram selling for $1billion, there is certainly room for a profitable company to sell for more.
What does it mean for photographers? well, first, that the market is expected to grow. Wether the profits of that growth will trickle down to them, that is another question. This is a great time to be very aware of what is going on in the market and to look for new opportunities. Microstock agencies might not be the only players in the next 5 years as a lot of tech companies are entering the market with new ideas.
Finally, new owners of Getty does not mean new management. In fact, they will keep the same team in place to guarantee their investments. Thus the risk of more percentage pression might not be as strong as you might think. There is always the risk of massive exodus to other platform if they squeeze photographers too much.
We should see, but overall, I think this is good news.

Paul Melcher
author/owner "thoughts of a bohemian"
ex CKO of Zimmetrical

bunhill · « **Reply #39 on:** July 30, 2012, 09:36 »

Quote from: oxman on July 28, 2012, 23:40

And this is why, I believe, we have not seen our 2012 RC levels. They will let the new buyers deal with that.

I rather doubt that whoever buys Getty is at this stage going to be in anyway concerned (or indirectly involved with) micro-managing something like RC levels at one of the constituent brands.

My assumption would be that, for the moment at least, the business at all its various different levels carries on as usual. I might be wrong but I would guess that it would be detrimental to a company and its brands (and therefore to the value) if there was ever any sort of idea that everything was somehow in limbo until after a sale.

EmberMike · « **Reply #40 on:** July 30, 2012, 09:48 »

Quote from: oxman

...I am hoping the new owners do not impose the 20% for all like the Getty main collection. But with Getty's debt load and investors squeezing them dry -- who knows...

I wouldn't be surprised to see something like 15% for independents, 25% for exclusives, no RC levels, canisters, etc. Just flat rates for all. Paying more than 20% to istock artists has always been a thorn in Getty's side. I'm sure they'd love to bring down the percentages even more.

I suspect we'll see cuts again soon, possibly this year, regardless of what happens with the Getty sale.

gostwyck · « **Reply #41 on:** July 30, 2012, 10:37 »

Quote from: pmelcher on July 30, 2012, 09:26

I would say this is good news for everyone in the industry. If a few equity firms are competing to purchase Getty at $ 4 billion, that means they see a strong potential for growth in the next 5 years ( usual time they take to spin around and resale). Combined with the investment of $150 million in Fotolia, it confirms that big investors see a growth in the image licensing market.

They might be looking at it but it is far from a done deal. It would appear that Getty's revenue has only increased from $858M in 2007 to $945M last year. That's not much to say the least. Istock would have been a tiny contributor to revenue in 2007 but now might be as much as 30% of the entire business. That suggests to me that most of the business has been in fairly serious decline (as indeed it had been prior to the H&F buyout) since then. Getty has also been stripped of $900M cash in 'dividends' over the last 18 months and saddled with tons of debt instead.

How can Getty be worth $4B or anything even remotely close to that figure? I think H&F must be hoping to find a mug punter with more spare cash than business sense but I doubt that they will be successful. We'd need to see more financial details but from what we know already I struggle to see why anyone would even offer the $2.4B that H&F originally paid for Getty.

http://www.wikinvest.com/stock/Getty_Images_(GYI)/Filing/10-K/2008/F2564506

cthoman · « **Reply #42 on:** July 30, 2012, 11:30 »

In addition to price, there does seem to be a lot of discouraging factors to buying it. They kind of created a mess when they decided to cross-pollinate their content to all their different sites. I don't even know how you would untangle that. I definitely would not want that job, and I wonder if anyone else would. I guess I'd be worried (if I was a contributor) about the entity that does buy it. They might just want to gut it for parts.

Sadstock · « **Reply #43 on:** July 30, 2012, 12:28 »

Quote from: cthoman on July 30, 2012, 11:30

In addition to price, there does seem to be a lot of discouraging factors to buying it. They kind of created a mess when they decided to cross-pollinate their content to all their different sites. I don't even know how you would untangle that. I definitely would not want that job, and I wonder if anyone else would. I guess I'd be worried (if I was a contributor) about the entity that does buy it. They might just want to gut it for parts.

---------------------------

Gutting Getty for parts might be the best thing that could happen for Istock, if it is split out as a single entity. If the SS IPO goes well, maybe there would be a demand for an Istock IPO?

DeStock · « **Reply #44 on:** July 30, 2012, 15:49 »

Quote from: cthoman on July 30, 2012, 11:30

In addition to price, there does seem to be a lot of discouraging factors to buying it. They kind of created a mess when they decided to cross-pollinate their content to all their different sites. I don't even know how you would untangle that. I definitely would not want that job, and I wonder if anyone else would. I guess I'd be worried (if I was a contributor) about the entity that does buy it. They might just want to gut it for parts.

This is the second round of bidding for Getty at that price. If the price was too high, there wouldn't be any bidders. Thus my strong belief that they see a strong growth for Getty in the next 5 years ( like trimming down the human salesforce by automating). Furthermore, Getty is too tightly integrated to try and sell it in parts. While possible, it might not reap the revenue expected. Getty makes more sense for an investor as whole than the sum of it's part.

gostwyck · « **Reply #45 on:** July 30, 2012, 16:24 »

Quote from: pmelcher on July 30, 2012, 15:49

This is the second round of bidding for Getty at that price. If the price was too high, there wouldn't be any bidders. Thus my strong belief that they see a strong growth for Getty in the next 5 years ( like trimming down the human salesforce by automating). Furthermore, Getty is too tightly integrated to try and sell it in parts. While possible, it might not reap the revenue expected. Getty makes more sense for an investor as whole than the sum of it's part.

It's not the 'second round of bidding', it's just that the deadline for bidding has yet to arrive (one week from today) and yet 2 interested parties have already taken flight. Businesses are (massively) over-priced and yet still attract bidders all the time. Facebook's IPO was fully subscribed at $38 but is already down 39% in value just 10 weeks later ... and IMHO is likely to drop to a fraction of the original launch price.

I'd agree it would make little sense to break Getty up for a sale. Getty's greatest strength (and therefore value) is in it's size and market share. H&F have squeezed all the cash out of Getty, mortgaged it to the hilt and now just want to get rid of it as quick as they can. I'm sure if you offered them $2B they would bite your hand off.

leaf · « **Reply #46 on:** July 30, 2012, 17:35 »

We are never going to totally loose getty. It's like a house property. Even if the owner goes bankrupt, the house doesn't disappear. It just falls into someone else's hands at a discounted rate. If Getty was in the discount bin, some other investor, business man, company would gobble them up.

Suljo · « **Reply #47 on:** July 30, 2012, 18:53 »

Quote from: leaf on July 30, 2012, 17:35

We are never going to totally loose getty. It's like a house property. Even if the owner goes bankrupt, the house doesn't disappear. It just falls into someone else's hands at a discounted rate. If Getty was in the discount bin, some other investor, business man, company would gobble them up.

Maybe for now they have only name and old content and new content is nothing special (Vetta DeBileta most) + * money from "both" IS contributors (ex and non ex). Money which they just sucked and testing a ground how they will give Mooooreeeeee

Maybe I am too boooooorring to all of you because this is my 3rd or 4th post about the same sick history at that subject.
For me it perfectly fits in my theory about black mailing old daddy Getty when he was live.

----------------------------------------------------------

First
Daddy Getty when he was a live was some kind of rich collector and he was blackmailed by Mafia.
Because of that how he can avoid that, he made public Foundation.
As in term of any Foundation is that it is to be sustainable as itself.
This is more visible as GettyImages site which can even afford that to by iStock site.

Second
Somehow Getty Foundation which is sustainable as it self which is not on free market with somehow process was purchased with murky Offshore lets say "investors" H&F(uckers) MAFIA.

Third
Seam As is
H&F = hidden MAFIA which came back to take easy money and they suck it now
This is front end
--------------------
For contributor back end is constantly lowering commissions throwing sand in the contributors eyes and selling the story of exclusivity and unsustainability?! what?!

Anyhow H&F is sckin Getty> Getty is sckin iStock> iStock is cheating us contributors.
H&F(uckers) (read Mafia not in figurative sense but in real) are making more murky debt and they deposit is Getty whole sucked and Gettys for now Livestock branches.

----------------------------------------------------------------------------

@ Leaf
Disable that lobotomy IGNORE button
I am boring to my self in repeating same old story: How fish is stinking from head, and this forum laments of minor technical problems while Greedy sharks grabs our money in tons from our eyes, and here we have fantastic IGNORE button which will help all us to share our thoughts.
Briliant
Will something Like/Dislike button wouldnt be enough in ranking useful vs trolling?

@ GostWyck Excellent post
They might be looking at it but it is far from a done deal. It would appear that Getty's revenue has only increased from $858M in 2007 to $945M last year. That's not much to say the least. Istock would have been a tiny contributor to revenue in 2007 but now might be as much as 30% of the entire business. That suggests to me that most of the business has been in fairly serious decline (as indeed it had been prior to the H&F buyout) since then. Getty has also been stripped of $900M cash in 'dividends' over the last 18 months and saddled with tons of debt instead.

How can Getty be worth $4B or anything even remotely close to that figure? I think H&F must be hoping to find a mug punter with more spare cash than business sense but I doubt that they will be successful. We'd need to see more financial details but from what we know already I struggle to see why anyone would even offer the $2.4B that H&F originally paid for Getty.

http://www.wikinvest.com/stock/Getty_Images_(GYI)/Filing/10-K/2008/F2564506

gostwyck · « **Reply #48 on:** July 30, 2012, 18:59 »

Quote from: leaf on July 30, 2012, 17:35

We are never going to totally loose getty. It's like a house property. Even if the owner goes bankrupt, the house doesn't disappear. It just falls into someone else's hands at a discounted rate. If Getty was in the discount bin, some other investor, business man, company would gobble them up.

Oh yes we will __ one day. Nothing is permanent in business. Getty didn't exist 50 years ago and it probably won't exist 50 years from now, other than having been absorbed decades earlier by a more successful business. The only real question (for us) is when that might happen and what might replace it.

The FTSE100 was started in 1984 comprising of the top 100 companies, valued by market share, listed on the LSE and collectively they had a market capitalisation of over 80% of all companies listed on the LSE. A decade later fewer than 40% of the businesses originally listed were still qualified to be registered on the FTSE100. Things change. Massively. Always.

RacePhoto · « **Reply #49 on:** July 30, 2012, 20:38 »

Since you seem to follow this closer and understand better, and I agree it's not bidding, it's just interest.

Do you know the 2011 figure for income percentage from IS? Or from RF? That's what I couldn't find and it seems like so many people are looking at this whole Getty thing from a personal MicroStock perspective, I'm wondering, how important is iStock/ThinkStock, in the big picture. (oh was that an inappropriate cliche in this case?)

Quote from: gostwyck on July 30, 2012, 16:24

Quote from: pmelcher on July 30, 2012, 15:49
This is the second round of bidding for Getty at that price. If the price was too high, there wouldn't be any bidders. Thus my strong belief that they see a strong growth for Getty in the next 5 years ( like trimming down the human salesforce by automating). Furthermore, Getty is too tightly integrated to try and sell it in parts. While possible, it might not reap the revenue expected. Getty makes more sense for an investor as whole than the sum of it's part.

It's not the 'second round of bidding', it's just that the deadline for bidding has yet to arrive (one week from today) and yet 2 interested parties have already taken flight. Businesses are (massively) over-priced and yet still attract bidders all the time. Facebook's IPO was fully subscribed at $38 but is already down 39% in value just 10 weeks later ... and IMHO is likely to drop to a fraction of the original launch price.

I'd agree it would make little sense to break Getty up for a sale. Getty's greatest strength (and therefore value) is in it's size and market share. H&F have squeezed all the cash out of Getty, mortgaged it to the hilt and now just want to get rid of it as quick as they can. I'm sure if you offered them $2B they would bite your hand off.

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Author Topic: H&F presses on with $4 billion Getty Images sale (Read 31242 times)

Caz

noodle

bunhill

Mantis

cathyslife

Sadstock

Lagereek

oxman

ffNixx

lisafx

RacePhoto

djpadavona

djpadavona

DeStock

bunhill

EmberMike

gostwyck

cthoman

Sadstock

DeStock

gostwyck

leaf

Suljo

gostwyck

RacePhoto

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