SCHEDULE 13D/A: Major Shareholders Back Getty Images' Merger with Shutterstock, Detail Post-Merger Governance

Getty Images' major shareholders, including Getty Investments and Mark Getty, have formally approved the company's merger with Shutterstock and outlined new governance and share transfer agreements.

Summary

• This document is an Amendment No. 1 to a Schedule 13D filing, updating information regarding Getty Images Holdings, Inc. (the "Issuer").
• On January 6, 2025, the Issuer entered into a multi-step Merger Agreement with Shutterstock, Inc., and its subsidiaries, which will result in Shutterstock becoming a wholly-owned subsidiary of the Issuer.
• The Issuer's board of directors unanimously approved the Merger Agreement and recommended the issuance of Class A Common Stock in connection with the Transactions.
• On January 7, 2025, the Reporting Persons (Getty Investments L.L.C., Cheyne Walk Master Fund 2 LP, Cheyne Walk Trust, The October 1993 Trust, Mark Getty, The Options Settlement) and Koch Icon Investments, LLC, who collectively own a majority of the outstanding Class A Common Stock, delivered written consent approving the stock issuance, negating the need for further stockholder approval.
• A Significant Stockholder Agreement, executed on January 6, 2025, imposes transfer restrictions on shares held by Reporting Persons, Koch Investor, and Jonathan Oringer post-closing, including a 90-day lock-up and restrictions on transfers to direct competitors or activist shareholders.
• The Significant Stockholder Agreement also grants director designation rights: Getty Investments can designate two directors if beneficial ownership is at least 12.5%, one if between 5% and 12.5%, and also the Chairman if entitled to two directors; Koch Investor can designate one director if beneficial ownership is at least 5%.
• A Letter Agreement, also dated January 6, 2025, outlines further transfer and voting restrictions for Reporting Persons until the merger's closing or termination, and requires their cooperation with regulatory approvals and the termination of the existing Stockholders Agreement.
• The Issuer agreed to reimburse Reporting Persons for certain expenses related to the Transactions, up to $400,000, excluding litigation or regulatory approval costs.
• An Amended and Restated Registration Rights Agreement will be entered into, committing the Issuer to coordinate an underwritten secondary offering of Class A Common Stock for certain stockholders within 90 days following the Closing.
• As of November 5, 2024, there were 411,074,838 shares of Class A Common Stock outstanding.
• Mark Getty beneficially owns 191,374,006 shares, representing 46.6% of the class. Getty Investments L.L.C., Cheyne Walk Master Fund 2 LP, and Cheyne Walk Trust each beneficially own 178,026,504 shares, representing 43.3% of the class.

Sentiment

Score: 7

Explanation: The document details a significant strategic merger supported by major shareholders, indicating a positive step for the company's future growth and market position. While there are standard merger-related risks and costs, the overall tone is one of strategic advancement and shareholder alignment.

Positives

• Unanimous board approval and significant shareholder consent for the merger indicate strong internal alignment and support for the strategic direction.
• The merger with Shutterstock could create a larger, more competitive entity in the digital content and stock imagery industry, potentially leading to synergies and increased market share.
• The establishment of clear governance rights for major shareholders through the Significant Stockholder Agreement provides stability and defined influence over the combined entity.
• The planned underwritten secondary offering post-closing could provide an avenue for liquidity for existing major shareholders.

Negatives

• Restrictions on share transfers for major shareholders, including a 90-day lock-up and prohibitions on sales to competitors or activist shareholders, could limit the immediate liquidity for these specific parties.
• The Issuer's agreement to reimburse Reporting Persons for certain expenses up to $400,000, while capped, represents a direct cost associated with the Transactions.

Risks

• The completion of the merger is subject to various terms and conditions, implying a potential for non-completion or delays.
• Regulatory approvals are required for the Transactions, which could introduce unforeseen delays, conditions, or even prevent the merger.
• The success and integration of the combined Getty Images and Shutterstock entity post-merger are not guaranteed, and achieving anticipated synergies may be challenging.
• The planned underwritten secondary offering of Class A Common Stock within 90 days following the Closing could potentially lead to increased supply of shares in the market, which might exert downward pressure on the stock price.

Future Outlook

The document outlines the planned multi-step merger of Getty Images Holdings, Inc. with Shutterstock, Inc., which is expected to result in Shutterstock becoming a wholly-owned subsidiary of Getty Images. Post-closing, an underwritten secondary offering of Class A Common Stock held by certain stockholders is anticipated within 90 days. The Reporting Persons intend to continuously review their investment and may adjust their holdings based on market conditions, the Issuer's business and prospects, other investment opportunities, and general economic conditions.

Management Comments

• The Issuer's board of directors unanimously approved and declared advisable the Merger Agreement, the Transactions and the other transactions contemplated thereby and resolved to recommend that Issuer's stockholders approve the issuance of shares of the Class A Common Stock in connection with the Transactions.

Industry Context

This announcement signifies a major consolidation within the digital content and stock imagery industry, bringing together two prominent players, Getty Images and Shutterstock. Such a merger could lead to increased market share, reduced competition, and potential synergies, reshaping the competitive landscape for content creators and licensees.

Management Changes

Corporate Governance

Related Party Transactions

• The Significant Stockholder Agreement, Letter Agreement, and Amended and Restated Registration Rights Agreement are entered into between the Issuer and its significant shareholders (Reporting Persons, Koch Investor, Jonathan Oringer), establishing specific rights and obligations regarding share transfers, voting, director designations, and expense reimbursements. These agreements govern the relationship and future actions between the company and its major beneficial owners.

Stakeholder Impact

• Shareholders: The merger and associated stock issuance will significantly alter the company's capital structure and ownership. Major shareholders will have defined governance rights and a planned secondary offering for liquidity. Other shareholders will be impacted by the strategic direction of the combined entity and potential stock price movements.
• Management: The board has unanimously approved the merger, indicating alignment. New director designation rights will influence future board composition and potentially the strategic direction of the combined entity.
• Regulatory Authorities: The transactions require regulatory approvals, indicating oversight and potential conditions from authorities, which could impact the timeline and terms of the merger.

Next Steps

• Completion of the First Merger (Merger Sub 1 into Shutterstock), followed by the LLC Conversion of Shutterstock.
• Completion of the Second Merger (Merger Sub 2 into HoldCo), followed by the Third Merger (HoldCo into Merger Sub 3).
• Termination of the existing Stockholders Agreement, effective at Closing.
• Seeking regulatory approvals required in connection with the Transactions.
• Entry into an Amended and Restated Registration Rights Agreement.
• Coordination of an underwritten secondary offering of Class A Common Stock within 90 days following the Closing.

Key Dates

Keywords

Getty Images, Shutterstock, Merger Agreement, SEC Filing, Schedule 13D, Beneficial Ownership, Corporate Governance, Stock Issuance, Shareholder Agreement, Registration Rights, Secondary Offering, Media Industry, Content Licensing