Getty Images to go public again in $4.8bn SPAC deal
Getty Images has revealed plans to rejoin the US stock market after more than a decade-long hiatus, in a $4.8bn (£3.6bn) SPAC deal.
The British-American visual media company, which provides stock and news photos, will merge with a special purpose acquisition company (SPAC) called CC Capital and Neuberger Berman, with total equity investment totalling $1.2bn.
That includes funds raised by the SPAC and a $150m private investment in public equity, or PIPE.
Getty is valued in the transaction at 15.2 times an estimated $315m in adjusted earnings before interest, taxes, depreciation and amortisation for 2022, the companies said. The SPAC is led by former Blackstone Group senior managing director Chinh Chu.
According to a recent interview, the company’s chief executive Craig Peters initially favoured a traditional initial public offering (IPO), but instead opted for the popular SPAC route, with CC Neuberger investing $600m in the transaction.
“It was really about CC Neuberger, I think much more so than it was about SPAC or IPO,” Peters said.
“That quantum of capital and that certainty and a partner that was very vested in the transaction and believed in the Getty business is really what differentiated them.”
Proceeds of the transition will be used to reduce the company’s debt levels, and invest in future growth.
Read more: Bitcoin and ethereum fall as crypto slide continues
SPACs, also known as “black cheque” companies, have boomed in popularity over the last year. They are companies with no business operations that raise money through a stock market listing and then use that money to buy another business.
SPAC investors are typically retail investors and these structures can give them access to private investments they would otherwise not be able to reach. For companies that sell to SPACs, these types of deals offer a quick and relatively easy way to list on the stock market.
Over $100bn has been raised through SPACs in just the last 12 months and the total raised in 2021 has already surpassed that of 2020.
Notable examples of companies that have gone public through SPACs include Nikola (NKLA), DraftKings (DKNG), and Virgin Galactic (SPCE). Social Capital founder Chamath Palihapitiya is the best known SPAC "sponsor," as founders of the vehicles are known.
In August this year, the Financial Conduct Authority introduced new rules to make it easier to list SPACs in the UK, which have featured heavily on Wall Street.
According to Norton Rose Fulbright, over the last five years, only around 50 SPACs have listed in the UK, with $2bn raised by SPACs on the London Stock Exchange since 2017.
This compares to hundreds of US-listed SPACs, with most European SPAC listings favouring Amsterdam.
Read more: UK economy slows to a crawl in October as GDP rises just 0.1%
Getty, which was established 26 years ago, was taken private in 2008 by the buyout firm Hellman and Friedman in a $2.4bn deal.
Hellman & Friedman then offloaded a controlling stake in the company to private equity firm Carlyle Group in a $3.3bn deal in 2012. The Getty family subsequently took control of the company in 2018, buying Carlyle’s holding.
The transaction is still to be approved by the SPAC’s shareholders, and the combined company’s shares are expected to trade on the New York Stock Exchange under the symbol GETY.
Watch: What are SPACs?
