Carlyle Group to buy Getty Images in $3.3B deal

August 15, 2012 - 4:36 PM

WASHINGTON (AP) — The Carlyle Group, one of the biggest private equity firms in the world, plans to buy a controlling stake in the photo and video distributor Getty Images in a $3.3 billion deal that gives the Getty family and management a larger share of the company.

Carlyle Group said Wednesday that it will partner with co-founders Mark Getty and Jonathan Klein and the Getty family in buying the company from another private equity firm, Hellman & Friedman.

Klein said Carlyle will have just over 50 percent control, with the remainder mostly held by the Getty family and a smaller stake for management, including himself. Klein said in an interview that it was a good time for the Getty family and management to increase their stake, which is about a third now.

The deal is expected to close later this year.

Getty Images Inc., which is based in Seattle, creates and distributes still images, video and multimedia products for customers to use in brochures, websites and other outlets.

The company is adding 100,000 customers every quarter, and existing customers are using more of its services, Klein said. The company is largely past a difficult transition period as its clients made the switch from print-focused products to ones that incorporate websites and mobile devices. It now has about 1.3 million customers per year.

That has made the business more stable.

"We feel that some of the industry dynamics, which were against us a few years ago, are now more in our favor," said Klein, who is also the company's CEO.

The company also plans to expand further into Asia and Latin America and release several new products including one that automatically updates photos on clients' websites based on certain keywords, he said.

Carlyle Partners V, a $13.7 billion U.S. buyout fund, will provide equity financing. Debt financing is coming from J.P. Morgan, Barclays, Credit Suisse, Goldman Sachs and RBC Capital Markets, although the amount of debt was not disclosed.

Hellman & Friedman bought Getty Images and took it private in 2008 in a deal valued at $2.04 billion. It paid $34 per share for Getty's outstanding shares and took on about $300 million in debt.