Getty Images, the famous licensee of stock images and videos to businesses and news outlets, is returning to the public markets. This time, it’s through the route of merging with a special-purpose acquisition company (SPAC).

• Getty has agreed to merge with CC Neuberger Principal Holdings II (NYSE: PRPB), a SPAC formed as a partnership between investment firms CC Capital and Neuberger Berman. The merger values Getty Images at $4.8bn and is expected to raise cash proceeds of $1.2bn, barring investor redemptions.

• The cash proceeds include funds held in trust by the SPAC ($720mn), subject to investor redemptions, and additional investments committed by CC Capital and Neuberger Berman. The average redemption rate in SPAC deals was 52% in this year’s third quarter, so we can expect a significant part of the cash held in the trust to be handed back “redeemed” to investors. CC Capital and Neuberger Berman, the sponsors, have committed up to $300mn to backstop investor redemptions to curb this.

• With this deal, Getty is returning to the public markets that it first stepped into with a 1996 IPO and got out of in 2008 when it sold to private equity firm Hellman & Friedman for $2.4bn. Hellman, in 2012, sold Getty to a rival PE firm, Carlyle Group, for $3.3bn; and Carlyle, in 2018, sold the company to the founding Getty Family for an undisclosed price. It’s the family that’ll mainly benefit from this SPAC merger, and secondly, Carlyle, which held onto some minority financial interest in Getty following the sale.

As expected with SPAC mergers, Getty Images opened the books into its finances. The company brought in $814mn in revenue in 2020, down from $846mn in 2019 and $868mn in 2018. It posted a net loss of $39mn in 2020, down from $51mn in 2019. Getty has significant debt on its books, and interest payments on that debt is a primary reason for its losses. In fact, the company says it’ll use $576mn of its merger proceeds to pay down debt.

Getty has a simple business model, selling licensed images and videos to businesses and news outlets. Lately, the subscription model for licensed footage is making up a great deal of Getty’s revenue, 46% in 2020 compared to 29% in 2016. The company says it’s looking towards markets outside the western hemisphere for growth prospects.

Getty Images’ business also includes the stock photo marketplaces iStock and Unsplash.

• Following the merger, Getty will start trading on the New York Stock Exchange (NYSE) with the ticker symbol “GETY“.

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