Getty Images (NYSE:GETY) and Shutterstock Inc (NYSE:SSTK) have announced they have entered into a merger agreement to create a single visual content company valued at $3.7 billion.
The combined company will be named Getty Images Holdings and will continue to trade on the New York Stock Exchange under the ticker symbol “GETY.”
It will be led by Craig Peters, Getty Images’ CEO. The new board will consist of 11 members, with six from Getty Images and four from Shutterstock, including Shutterstock CEO Paul Hennessy.
"With the rapid rise in demand for compelling visual content across industries, there has never been a better time for our two businesses to come together," Peters said in a statement.
As part of the merger, the combined company expects significant synergies, projected to save between $150 million and $200 million annually by the third year after closing.
It is anticipated that the merger will become accretive to earnings and cash flow beginning in the second year.
Shutterstock shareholders will have the option to receive $28.85 per share in cash, 13.67 shares of Getty stock, or a combination of both.
Upon closing, Getty shareholders are expected to hold approximately 54.7% of the new company, while Shutterstock shareholders will hold 45.3%.
Shares of Getty surged 24.7% to $3.21 on the news while Shutterstock shares added 20.3% at approximately $36.