Why Getty Images gambled on a SPAC to go public after a 14-year absence from public markets

Good morning,

U.S. companies going public through a special purpose acquisition company (SPAC) was a hot trend in 2021. But many investors have since soured on those businesses amid the recent market downturn and the increased threat of regulation of SPACs.

Yet Getty Images, the photo and video licensing library, plowed ahead with a SPAC anyway instead of the more traditional initial public offering. On July 25, it completed a SPAC deal with CC Neuberger Principal Holdings II and began trading under the ticker GETY.

“Obviously, this market is very different now than what it was a year and a half ago when we started this process, but we actually think it’s a great time for Getty Images to return to the public markets,” Jennifer Leyden, SVP and CFO at Getty Images told me after she joined CEO Craig Peters and other colleagues and photographers on Monday morning to ring the opening bell at the New York Stock Exchange. “We’re 27 years old, and we’re profitable.”

“The reason we set out to do this was essentially to clear out some debt from our balance sheets and deleverage the business,” Leyden says. “So, in spite of market conditions, we’ve done exactly what we set out to do.” 

Getty Images announced plans for its SPAC in December in a deal valued at $4.8 billion, according to the company. On the day the deal closed, its shares finished at $27.73. On Monday, they closed at $30.37, marking a sizable gain during a time that the broader market has started to rebound.

Getty Images was founded in 1995 and listed on the Nasdaq National Market in July 1996. But it went private when acquired by private equity firm Hellman & Friedman in 2008. It was then bought by the Getty family in 2018. The company’s key customers are ad and graphic design companies, print and online media, and corporate marketing, communications, and in-house design departments.

In Q2, Getty Images reported revenue of $233.3 million, an increase of 4.1% year over year. Editorial revenue reached $82.9 million, up 15% year over year and 19.8% on a currency-neutral basis. Getty Images has photographers covering events all over the world, and you’ve probably seen their work in the news. I asked Leyden, CFO since January, but with the company since 2016 in various financial leadership roles, how the company deals with the risk of dispatching photographers covering the war in…