The Getty family and Koch's investment arm plan to put in up to $533 million of new equity and own all of the company. The shares fell about 68% on Monday, to just over a penny.
Getty Images went public through a blank-check merger in 2022 that valued it at about $4.8 billion. On Monday it agreed to a restructuring that hands the whole company to two private investors and leaves public stockholders with nothing.
Under a restructuring support agreement announced Monday, affiliates of the Getty family and of Koch Equity Development, the principal investment arm of Koch Inc., committed to invest up to $533 million of new equity. On emerging from the process, they will own 100% of the reorganized company.
Getty plans to seek creditor approval of its reorganization plan in the coming days and then file a prepackaged Chapter 11 case in the coming weeks. It expects to complete the process by the end of the year.
The Debt Deal
The company carried about $2.1 billion of debt at June 30. Holders of 83.5% of its unsecured bonds agreed to retire $270 million of senior unsecured notes, about 13% of that total. Holders of about 89% of its secured bonds and term loans, and all of its revolving-credit lenders, agreed to lower interest costs and extend maturities. Koch Equity Development will also provide up to $143 million of financing to fund the restructuring.
Vendors will be paid in full, and the company will keep operating normally.
The Shareholders
Getty's existing common stock will receive nothing under the plan, according to the company's risk disclosures, and the shares are moving from the New York Stock Exchange to over-the-counter trading. They fell about 68% on Monday to roughly $0.015.
Getty's stock market value was about $21 million at Friday's close. The new equity commitment is about 26 times that figure.
The restructuring follows the collapse of Getty's planned combination with Shutterstock, which was abandoned.
Who Ends Up Owning It
Since 2012, the Koch unit says, it has put more than $40 billion to work through acquisitions and equity stakes. Pairing it with the founding family gives the reorganized company owners with a long history in the business and a deep-pocketed partner.
The release did not disclose how ownership will be split between the family and Koch, the value assigned to the reorganized company or the new terms on its secured debt.
Market Implications
One reading is that this is a clean reset. Creditors are cooperating, vendors are protected, the business keeps running and new owners are committing fresh capital, which gives Getty room to invest without public-market pressure.
A second reading is that it shows how a highly levered blank-check listing ends. The insiders and their partner gain full control through a court process at a price that gives public holders nothing, and the equity value assigned at emergence has not been disclosed.
What To Watch
The plan solicitation and the Chapter 11 filing will reveal the valuation of the reorganized company and how the equity is divided. Court approval of the plan is the final step before the company becomes private.