Carlyle Group LP (CG) has taken the lead in bidding for Getty Images Inc., the photo archive being sold by private-equity firm Hellman & Friedman LLC, according to people with knowledge of the situation.
CVC Capital Partners Ltd., which is also bidding, has so far declined to top Carlyle’s offer, said one of the people, who sought anonymity because the talks are private. CVC could come back and raise its bid later, said this person. Getty is likely to sell for about $3.3 billion to $3.4 billion, less than the $4 billion that Hellman & Friedman had been seeking, another one of the people said.
A sale at that price would probably generate a profit for San Francisco-based Hellman & Friedman, which paid $2.4 billion to take Getty Images private four years ago and took out dividends of at least $950 million. Seattle-based Getty Images, the No. 1 distributor of archived photos, paid $96 million to buy smaller competitor JupiterImages in February 2009, according to data compiled by Bloomberg.
Getty Images hired Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) a few months ago to examine a possible sale or public stock offering, according to another person with knowledge of the matter.
Getty Images was founded in 1995 by Mark Getty and Jonathan Klein, and was the first stock-photo business to license images online, according to its website. Competitors include Seattle- based Corbis Corp., owned by Microsoft Corp. (MSFT) co-founder Bill Gates.
Dividend Payments
Officials for Washington-based Carlyle Group, CVC, Goldman Sachs, Hellman & Friedman and JPMorgan declined to comment.
Getty Images in March raised $350 million with a term loan as part of a $455 million dividend to Hellman & Friedman, Moody’s Investors Service said at the time. In November 2010, the company raised $1.27 billion in debt to recapitalize and pay Hellman & Friedman a dividend estimated at $495 million by Moody’s.
Carlyle, which oversees 94 funds and 63 funds-of-funds, has been an active buyer. In the past month, the company agreed to buy a unit from United Technologies Corp. and a majority stake in TCW Group Inc. the $131 billion asset manager founded by Robert Day in 1971.
The purchases have helped Carlyle deploy 80 percent of the capital from its flagship buyout fund, bolstering its pitch for fresh capital as it markets a successor pool.
By Cristina Alesci and Jeffrey McCracken
Courtesy of Bloomberg News
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