Getty Images to File for Bankruptcy, Go Private In Restructuring Deal

After abandoning a $3.7 billion merger merger with rival Shutterstock in late June over a regulatory roadblock, Getty Images now plans to file for Chapter 11 bankruptcy and go private in partnership with Charles Koch’s investment firm.

As the company undergoes an overhaul it says that there will be no impact on operations, employees, partners and vendors. It plans to undergo a prepackaged Chapter 11 process shortly and emerge from restructuring by the end of the year. Getty provides wire service photography and video to news outlets and businesses globally, including most red carpets and film festival premieres.

The company disclosed in an investor presentation on Monday that its iStock eCommerce business has seen “declining agency demand and disruption,” presumably due to the rapid adoption of AI tools and products that have made stock image creation easy.

Yet Getty projects growth in its core editorial image unit, forecasting that the division that’s powered by news images (i.e. real photos of actual events that have occurred), will grow from $369 million to $400 million by 2029.

During its latest earnings call in August, CFO Jennifer Leyden said annual subscribers fell from 321,000 to 241,000 over the prior year but due to a “deliberate strategy to deemphasize lower-value acquisition channels, including the discontinuation of our iStock free trial program.”

“Getty Images is uniquely trusted around the world as the unparalleled leader in premium visual content,” said Mark Getty, co-founder and chairman of the Board. “This transformational transaction is underpinned by the strength of the business and the significant growth potential we see ahead. I am pleased to continue our strong partnership with Koch Equity Development and the lender groups to provide capital structure improvements that will enable us to build on our solid foundation and seize new growth opportunities.”

Affiliates of Koch Equity Development have pledged up to $533 million of new equity to help the image provider go from a publicly traded firm to setting itself up as a private company.

Mike Harris, senior managing director and co-head at Koch Equity, added: “We remain confident in the company’s future and fully support this transaction alongside the Getty family. This equity investment will provide Getty Images with a firm financial foundation and greater flexibility to continue investing in its employees, customers, contributors, and future growth.”