Getty IPO: 'We’re playing into an incredibly visual future,' CEO says

Getty Images CEO Craig Peters joins Yahoo Finance Live to discuss the image supplier going public via a SPAC merger and its $4.8 billion valuation leading into the IPO.

Video Transcript

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- Getty Images has said it's going to go public sometime in the first half of 2022 after merging with a SPAC called Neuberger Principal Holdings II. The company was taken private by private equity shop Hellman and Friedman back in 2008 at a $2.4 billion valuation, and has undergone some ownership shifts since.

Today, Getty Images being valued at $4.8 billion in this new SPAC deal. And joining us now is Getty Image's CEO, Craig Peters. Craig, thanks so much for being here. Those of us in the media world are quite familiar with Getty, because we use your images frequently. And people who consume media might not even know the name, but they certainly know the photos and the videos for the company. Talk to me first of all, about the timing here and the form by which you're coming back to public markets. Why did you guys feel like this was the time?

CRAIG PETERS: Well, I think the timing is that the business is performing incredibly well. We feel really good about the prospects of this business. And ultimately, we're playing into an incredibly visual future. And you know, our business is helping customers like Yahoo! play into that visual landscape and compete. And so we feel really good about the business. And so that was really what drove the timing.

On the transaction itself, you know, we looked at a variety of options, traditional IPO, SPAC, and to be candid, as we entered this, we were really thinking we would probably go down the traditional IPO route. However, we found a partner in CC Neuberger which was really unique. They've provided a level of capital certainty to this deal, along with our existing shareholders, and the Getty family, and Coke Equity Development that accumulates to about $800 million worth of capital certainty.

And that's really unique I think when you look at the SPAC landscape, and the transactions that are out there. And so for that reason, you know, the certainty of that transaction, the quality of the partners that we are adding, and CC Neuberger alongside our existing long term shareholders, we felt really good about this transaction combined again, with our prospects for the business going forward.

- And Craig, also unique to this deal I would say, is that you're making money, a good sum of money, and in many respects, do have a wide moat around what you do. 73% gross margins estimated this year, 32% adjusted operating margins. I mean, that is impressive stuff. What is driving your business right now?

CRAIG PETERS: Well, it really goes back to that visual landscape. You know, the world is increasingly visual. Businesses need to be online. They need to be online in a variety of places, social media, advertising. Obviously, they need to maintain a web presence, a mobile presence, et cetera. And that's a challenging thing to do.

And Getty Images is helping not only media businesses, not only ad agencies, but increasingly the corporate market do that from the largest enterprises down to the smallest small businesses. And that's really driving our business. Think about today, a small business needs to look like a big business online. And they need to be everywhere a big business is.

And so through our iStock brand, we're really helping those small businesses do that. And then through our Unsplash acquisition, which we made in April this year, we're really extending that out even further to the semi-professional creator, and that creative long tail. So just a lot of opportunity for the business, which is driving our growth, and ultimately, driving a lot of the financials that you referenced.

- So Craig, talking about the different sort of levels that you guys have, price points that you have in those different business offerings, you also mentioned in the investment presentation that you might use some of these proceeds to go out and make more acquisitions. Where will those fit in? Will they fit in price point? Will they fit in in terms of expanding the library at Getty? Where are you looking to maybe plug holes or expand in the business?

CRAIG PETERS: Well, I think we feel really good about the footprint we have right now. We do believe we cover the full market opportunity in terms of the enterprise, the small businesses, and then that creative long tail. And we feel really good about the organic growth opportunities that sit in this business. You know, we feel great about the corporate market, and how we're growing there. We feel great about video, and the growth that that's generating in this business. We believe we can market more aggressively to continue to grow our new customers, and ultimately, new business.

But you know, there may be opportunities to do further acquisitions. And I think we'll look at them selectively. I don't think this is a M&A strategy. I think it's one where we're largely focused in on our organic strategy. But there might be opportunities to accelerate, you know, geographic penetration, or certain content opportunities as they arise. But we'll see those as they present themselves.

- I can't think of too many businesses better positioned to launch an NFT strategy. Is that in your plans for next year?

CRAIG PETERS: It's something we're looking at. And we certainly see our assets. We're an intellectual property owner, which is pretty unique in our space. We actually own and produce a lot of the content that we distribute. And with our archive, that really goes back to the start of visual imagery. We see that as an asset that can play into that.

It's not embedded in our financials today, the growth that we produce, and the profitability that we produce, and the customers that we serve continue to drive this business. But we do think it's something that can add to this business over time, whether it adds this business meaningfully in 2022, or even 2023, yet to see. We're going to take it cautiously as we do sit on again, a wealth of intellectual property. And we want to make sure that we're going to market in the right ways around NFTs. But we do see it as an opportunity going forward.

- And Craig, I've talked to a few people who are familiar with Getty, and they all point to your company having a very unique culture, and in many respects, being a secret weapon to Getty. So how do you describe your company's internal culture?

CRAIG PETERS: It is unique. You know, we start with a mission that we want to move the world. We believe that as a business, we can do bigger and better things, and really have an impact across the world. And whether that's covering the US border crisis, covering floods and natural disasters, or you know, really representing underrepresented communities in a positive way, we fundamentally think we can have an impact, a positive impact against the world. So I think that that mission is a binding one into this business.

And then I think we all hold ourselves accountable to what we call our leadership principles. But they're really intended to make sure that everybody can come into this business, and give their very best. And it's an important part of this business. And it's one that in this environment of the great resignation, we're seeing employee turnover at 5% or less. And I think that's a real tribute our mission, and ultimately, to the values that we all try to own and represent.

- Craig, very interesting stat there. Craig Peters, Getty Image's CEO. Thanks so much, and let's stay in touch as you guys complete your transaction and go public. Thanks so much for being here.

CRAIG PETERS: Thanks for being--