425: Shutterstock Files Supplemental Proxy Statement Amid Shareholder Lawsuits Over Getty Images Merger Disclosures

Sentiment:

Merger Update 30 May 2025 5:25 PM

Shutterstock, Inc. has filed a supplemental proxy statement to address shareholder lawsuits alleging incomplete disclosures regarding its proposed merger with Getty Images Holdings, Inc., aiming to mitigate litigation risks and avoid transaction delays.

Capital raiseThe document mentions a risk factor related to 'Getty Images ability to complete any refinancing of its debt or new debt financing on a timely basis, on favorable terms or at all,' indicating a potential need or plan for debt-related capital activities in connection with the merger.

Worse than expectedThe company is facing two shareholder lawsuits and additional demand letters alleging incomplete and misleading disclosures in its proxy statement for the proposed merger.These legal challenges could lead to injunctions, rescission of the merger, or significant damages, creating substantial legal and financial uncertainty.Shutterstock felt compelled to issue supplemental disclosures, even while denying wrongdoing, to mitigate the risk of delays and costs associated with the litigation.

Summary

Shutterstock, Inc. filed a Form 8-K to supplement its definitive proxy statement related to the previously announced merger with Getty Images Holdings, Inc.
The merger involves a complex series of transactions where Shutterstock will ultimately become a wholly-owned subsidiary of Getty Images.
Two shareholder lawsuits, Johnson v. Shutterstock, Inc., et al. and Weiss v. Shutterstock, Inc., et al., have been filed against Shutterstock and its board in New York, alleging false, misleading, and/or incomplete information in the original proxy statement.
These lawsuits seek an injunction to prevent the merger unless additional disclosures are made, or rescission of the transactions and damages if consummated.
Additionally, certain purported stockholders sent demand letters with similar allegations regarding disclosure deficiencies.
Shutterstock denies the allegations of wrongdoing or that additional disclosure is legally required, but is voluntarily providing supplemental disclosures to avoid delays and minimize litigation costs.
The supplement includes updated unaudited prospective financial information for both Shutterstock (forecasted through 2034) and Getty Images (forecasted through 2029).
It also amends sections related to the opinions of financial advisors J.P. Morgan Securities LLC and Allen & Company LLC, updating comparable company analyses and implied equity value ranges for both companies.

Sentiment

Score: 4

Explanation: The filing indicates significant legal challenges (shareholder lawsuits) against the company and its board regarding the merger proxy statement. While the company is taking steps to address these, the existence of such litigation and the need for supplemental disclosures introduce uncertainty and potential costs, negatively impacting sentiment despite the ongoing merger process.

Positives

Shutterstock is proactively addressing shareholder concerns by providing supplemental disclosures, which may help mitigate litigation risks and facilitate the merger process.
The company is proceeding with the merger, indicating continued commitment to the strategic transaction despite legal challenges.

Negatives

Two shareholder lawsuits and additional demand letters have been filed against Shutterstock and its board, alleging incomplete and misleading disclosures in the merger proxy statement.
The lawsuits seek an injunction to prevent the merger or rescission of the transactions and damages, creating legal uncertainty and potential significant costs.
The voluntary nature of the supplemental disclosures, despite the company denying legal necessity, suggests perceived deficiencies in the initial proxy statement.

Risks

Litigation risk: The Stockholder Actions and Demand Letters could delay or otherwise adversely affect the implementation of the Transactions.
Unanticipated costs: Litigation inherently involves costs, risks, and uncertainties.
Failure to obtain approvals: Risk of not obtaining applicable regulatory or stockholder approvals in a timely manner or otherwise.
Interloper risk: Potential for third-party interference in the merger process.
Failure to satisfy closing conditions: Risk of not completing the Transactions on anticipated terms and timing (or at all).
Negative effects on business: Announcement of Transactions could impact Shutterstock's or Getty Images' ability to retain key personnel, maintain customer/supplier relationships, or affect operating results.
Integration risks: Businesses may not be integrated successfully, or expected benefits, cost savings, accretion, synergies, and growth may not be realized as expected, or may take longer/be more costly to achieve.
Disruptions from Transactions: Risks that disruptions from the merger process will harm business plans and operations.
Restrictions during pendency: Restrictions during the merger process that may impact the ability to pursue certain business opportunities or strategic transactions.
Potential litigation: Ongoing or new litigation associated with the Transactions.
Impact on relationships: Potential impact of the announcement or consummation of the Transactions on Getty Images', Shutterstock's, or the combined company's relationships with suppliers, customers, employers, and regulators.
Demand for products: Risk related to demand for the combined company's products.
Getty Images stock price changes: Potential changes in the Getty Images stock price that could negatively impact the value of the consideration offered to Shutterstock stockholders.
Termination of Transactions: The occurrence of any event that could give rise to the termination of the proposed Transactions.
Debt refinancing: Getty Images' ability to complete any refinancing of its debt or new debt financing on a timely basis, on favorable terms or at all.

Future Outlook

The document provides detailed forward-looking financial forecasts for both Shutterstock (through 2034) and Getty Images (through 2029), outlining expected revenue, gross profit, Adjusted EBITDA, Taxable EBIT, and NOPAT. It also discusses the expected timing and benefits of the proposed merger, including anticipated cost savings, accretion, synergies, and growth. However, it explicitly highlights various risks that could cause actual results to differ materially from these forward-looking statements, such as failure to obtain approvals, integration challenges, and potential litigation impacts.

Management Comments

Shutterstock believes it has substantial defenses in connection with the Matters and no supplemental disclosure is required under applicable law.
However, in order to avoid the risk that the Matters may delay or otherwise adversely affect the implementation of the Transactions, to minimize the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, Shutterstock has determined to voluntarily supplement the Proxy Statement as described in this Current Report on Form 8-K to provide additional information to Shutterstock stockholders.
To the contrary, Shutterstock denies all allegations in the Matters that any additional disclosure was or is required.

Industry Context

This filing details a significant proposed merger between Shutterstock and Getty Images, two prominent players in the media and content industry. The financial analyses presented by J.P. Morgan and Allen & Company compare these companies to a range of publicly traded entities in the broader digital content, e-commerce, and online marketplace sectors, including Angi Inc., eBay Inc., Etsy, Inc., Fiverr International Ltd., GoDaddy, Inc., Upwork, Inc., Bumble Inc., Chegg, Inc., GoodRx Holdings, Inc., Groupon, Inc., Match Group, Inc., and Yelp Inc. This strategic consolidation reflects ongoing dynamics within the digital content market, potentially driven by evolving content consumption patterns, competitive pressures, and the increasing relevance of AI-generated content, as companies seek to enhance market position and achieve synergies.

Comparison to Industry Standards

J.P. Morgan's analysis compared Shutterstock and Getty Images to selected publicly traded companies based on their FV/2025E Adj. EBITDA Multiples, including Angi Inc. (6.8x), eBay Inc. (9.5x), Etsy, Inc. (9.9x), Fiverr International Ltd. (13.6x), Getty Images Holdings, Inc. (7.5x), GoDaddy, Inc. (20.9x), and Upwork, Inc. (11.0x).
Allen & Company's analysis for Shutterstock reviewed 2025 and 2026 EBITDA (Pre-SBC) multiples of Shutterstock selected companies: Bumble Inc. (9.1x, 8.5x), Chegg, Inc. (3.3x, 3.5x), Etsy, Inc. (10.1x, 9.5x), Getty Images Holdings, Inc. (7.1x, 6.8x), GoodRx Holdings, Inc. (6.9x, 6.3x), Groupon, Inc. (8.1x, 6.8x), Match Group, Inc. (9.1x, 8.5x), Upwork Inc. (11.3x, 9.5x), and Yelp Inc. (7.3x, 6.9x). The overall low to high range for 2025 was 3.3x to 11.3x, and for 2026 was 3.5x to 9.5x.
Allen & Company then applied a selected range of 5.0x to 6.5x for 2025 estimated EBITDA (Pre-SBC) multiples and 4.5x to 6.0x for 2026 to Shutterstock's forecasts, indicating implied equity value reference ranges of $34.70 to $45.92 per share (2025) and $34.20 to $46.49 per share (2026).
Allen & Company's analysis for Getty Images reviewed 2025 and 2026 EBITDA (Pre-SBC) multiples of Getty Images selected companies: Bumble Inc. (9.1x, 8.5x), Chegg, Inc. (3.3x, 3.5x), Etsy, Inc. (10.1x, 9.5x), GoodRx Holdings, Inc. (6.9x, 6.3x), Groupon, Inc. (8.1x, 6.8x), Match Group, Inc. (9.1x, 8.5x), Shutterstock, Inc. (4.3x, 3.9x), Upwork Inc. (11.3x, 9.5x), and Yelp Inc. (7.3x, 6.9x). The overall low to high range for 2025 was 3.3x to 11.3x, and for 2026 was 3.5x to 9.5x.
Allen & Company then applied a selected range of 7.0x to 8.5x for 2025 estimated EBITDA (Pre-SBC) multiples and 6.5x to 8.0x for 2026 to Getty Images' adjusted forecasts, indicating implied equity value reference ranges of $2.03 to $3.11 per share (2025) and $1.90 to $3.03 per share (2026).

Legal Proceedings

Johnson v. Shutterstock, Inc., et al., 682860/2025, filed in the Supreme Court of the State of New York, County of New York, Commercial Division.
Weiss v. Shutterstock, Inc., et al., 652853/2025 at ECF No. 1, filed in the Supreme Court of the State of New York, County of New York, Commercial Division.
Both Stockholder Actions allege that the Proxy Statement contains false and misleading and/or incomplete information regarding the Transactions.
The Stockholder Actions assert claims for (i) negligent misrepresentation and concealment, and (ii) negligence in connection with the filing of the allegedly false and misleading Proxy Statement.
The Stockholder Actions seek an injunction enjoining the consummation of the Transactions unless and until the Individual Defendants disclose the allegedly omitted material information, in the event that the Transactions are consummated, rescission of the Transactions and awarding actual and punitive damages to plaintiff, and an award of attorneys and experts fees.
Beginning on April 25, 2025, certain purported stockholders of Shutterstock and Getty Images sent demand letters alleging similar deficiencies regarding the disclosures made in the Proxy Statement and seeking additional disclosures.

Stakeholder Impact

Shareholders (Shutterstock): Facing litigation that questions the adequacy of information provided for the merger vote; potential for delays or changes to the merger terms; value of consideration could be impacted by Getty Images stock price changes.
Employees: Potential impact on retention and hiring of key personnel due to merger announcement; risks related to business integration.
Customers & Suppliers: Potential negative effects on relationships due to merger announcement and integration.
Regulators: SEC has declared the S-4 effective, but ongoing litigation highlights regulatory scrutiny of disclosures.

Next Steps

Shutterstock stockholders will hold a special meeting on June 10, 2025, to vote on the adoption of the Merger Agreement.
Completion of the proposed Transactions is subject to obtaining applicable regulatory and stockholder approvals and satisfying other closing conditions.
Post-merger, there will be an integration of the Shutterstock and Getty Images businesses.
Getty Images may pursue refinancing of its debt or new debt financing.

Key Dates

Date	Description
September 30, 2024	Date for net debt, cash, debt, noncontrolling interests, and unconsolidated assets used in financial analyses by J.P. Morgan and Allen & Company.
November 29, 2024	Ex-dividend date for Shutterstock dividend payouts, adjusted for in Allen & Company's analysis.
December 31, 2024	Fiscal year end for Shutterstock and Getty Images forecasts; date as of which present value of cash flows and terminal values were estimated in discounted cash flow analyses.
January 2, 2025	Last trading day prior to public rumors of a potential merger of Shutterstock and Getty Images (unaffected date) used for Getty Images financial data by Allen & Company.
January 6, 2025	Shutterstock, Inc. entered into the Agreement and Plan of Merger with Getty Images Holdings, Inc. and related subsidiaries.
March 31, 2025	Getty Images filed a registration statement on Form S-4 with the SEC.
April 25, 2025	Certain purported stockholders of Shutterstock and Getty Images began sending demand letters alleging disclosure deficiencies.
April 28, 2025	Amendment No. 1 to the Form S-4 registration statement was filed.
April 30, 2025	The Registration Statement on Form S-4 was declared effective by the SEC. Shutterstock filed its definitive proxy statement, and Getty Images filed its definitive information statement/prospectus. Mailing to respective stockholders commenced.
May 30, 2025	Date of the Current Report on Form 8-K; date as of which the information contained in the report speaks, unless otherwise indicated.
June 10, 2025	Special meeting of Shutterstock stockholders to be held to consider and vote on the proposal to approve the adoption of the Merger Agreement.

Recommendation

hold

Keywords

Shutterstock, Getty Images, Merger Agreement, SEC Filing, Form 8-K, Proxy Statement, Shareholder Lawsuit, Litigation, Corporate Governance, Financial Forecasts, Adjusted EBITDA, NOPAT, Stock Photography, Content Licensing, Digital Media, Acquisition

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