Private equity firm Carlyle Group LP has agreed to buy Getty Images Inc from Hellman & Friedman for $3.3 billion in a partnership with company management, betting on growing demand for online imagery products as the media industry shifts away from print.
Carlyle will take a controlling stake in Getty, the largest supplier of stock photos, video and other digital content, while Getty's co-founders will own the rest, the companies said on Wednesday.
Reuters reported on Tuesday that Carlyle was nearing an agreement to purchase Getty and could have an announcement as early as Wednesday, citing two people familiar with the matter.
Mark Getty, Getty Images' co-founder and chairman, and the Getty family will put nearly all their ownership interests into the deal, and Chief Executive and co-founder Jonathan Klein will also invest equity in the company.
Getty, which for the first time shot images at the Olympic Games in London in 3-D and 360-degree formats using robotic cameras, is changing private equity hands at a time when the media landscape is becoming ever more competitive.
Founded in 1995 by Mark Getty and Klein, Getty has had to adapt to a shift in the media industry to online from print, as demand for images grows in an environment where prices for online use are lower than for print use.
A sale would come more than four years after Hellman & Friedman bought a majority stake in Getty Images in a $2.4 billion deal.
Carlyle Partners V, a $13.7 billion US buyout fund, will provide equity financing for the investment. JPMorgan, Barclays, Credit Suisse, Goldman Sachs and RBC Capital Markets have provided committed debt financing for the transaction.
Goldman and JPMorgan also advised Getty Images on the deal.
The deal underscores a robust appetite for secondary buyouts - sales from one private equity firm to another - as the industry is flush with capital that it is looking to put to work, and the initial public offering market remains choppy.
Carlyle prevailed over other private equity bidders in the auction for Getty, including CVC Capital Partners Ltd, sources have said.
Carlyle invested $1 billion in private equity in the second quarter but has since announced deals, expected to close by the end of the year, for which it will commit at least $1.6 billion, Carlyle's co-chief executive, William Conway, told analysts on an earnings conference call on Aug 8.
Much of Carlyle's prolific deal activity in recent months is related to the dynamics of Carlyle Partners V, which the private equity firm is putting to work. The fund's investment period runs through May 2013, Conway said.