Carlyle Group to buy Getty Images

Yesterday was announced that The Carlyle Group and Getty Images Management will acquire Getty Images from Hellman and Friedman in a transaction valuing target to 3.3 bn USD (including debt). Carlyle Group will acquire a controlling stake (reportedly slightly above 50%), remaining shares are held by Co-Founder and Chairman Mark Getty, his family and management (also involved in pending transaction). The buyout fund Carlyle Partners V managing assets totaling 13.7 bn USD will provide equity financing for the investment.

Hellman and Friedman will realize significant profit: the private equity fund bought 70% stake four years ago for 2.4 bn USD (unofficial information) and in the meantime Getty Images paid to its shareholders significant dividends (504 mn USD in 2010 and 379 mn USD in 2012).

Getty Images is owner of iStockphoto, one of the most successful microstock agencies. However, there will be no changes for contributors selling photos and illustrations with iStockphoto, because replacement of the old management is highly unlikely. Also, the new owner is a financial institution too, so boosting profits will remain one of the top priorities. As a result, pressure to keep royalties at very low level will continue.

Transaction involving iStockphoto follows ownership changes in the microstock industry that were announced earlier this year. In May 2012, the leading microstock agency Shutterstock announced intention to realize IPO and filled Registration Statement with SEC (available here). In addition, Fotolia announced in the same month that the private equity fund Kohlberg Kravis Roberts & Co spent 150 mn USD to acquire 50% stake in this microstock agency (press release).