NEW YORK (Reuters) - Private equity firm Carlyle Group LP (CG.O) is nearing an agreement to acquire Getty Images Inc from Hellman & Friedman LLC and could announce a deal as early as Wednesday, according to two people familiar with the matter.
Getty Images, which for the first time shot images in the Olympic Games in London this year in 3D and 360 degree formats using robotic cameras, is set to change private equity hands at a time when the media landscape is becoming ever more competitive.
Founded in 1995 by Mark Getty and Jonathan Klein, Getty has had to adapt to a shift in the media industry to online from print, as demand for images grows in an environment where prices for online use are lower than for print use.
Carlyle has prevailed over other private equity bidders, including CVC Capital Partners Ltd, the sources said, in the auction for Getty, the largest supplier of stock photos, video and other digital content.
The value of the transaction was not immediately available on Tuesday, but sources familiar with the matter said previously that Getty Images could be worth more than $3.5 billion.
The people familiar with the matter cautioned that final details are still being worked out and there is no certainty that an agreement will be reached.
They asked not to be named because the matter is not public. Carlyle declined to comment while Hellman & Friedman and Getty were not immediately available for comment.
A sale would come more than four years after Hellman & Friedman bought a majority stake in Getty Images in a $2.4 billion deal.
Such a deal underscores robust appetite for secondary buyouts - sales from one private equity firm to another - as the industry is flush with capital it is looking to put to work, and the initial public offering market remains choppy.
In addition to Carlyle and CVC, private equity firms TPG Capital LP, Charterhouse Capital Partners LLP and KKR & Co LP (KKR.N) also considered a buyout of Getty Images, sources have said.
Since the 2008 buyout, Getty’s earnings have grown through acquisitions, and the business has also enjoyed increasing demand for its online imagery products and services, they said.
The leveraged buyout of Getty in 2008 by Hellman included more than 50 percent equity, compared with less than 30 percent for many of the similar deals in 2007, Moody’s Investors Service Inc said in a report last month.
This left the company with room to borrow further. In March, Hellman and the company’s minority shareholders reaped a $379 million dividend from Getty funded with debt and $115 million of cash. This followed a $504 million dividend at the end of 2010.
Getty Images produces and distributes still imagery, video and multimedia products to media customers in more than 100 countries.
Hellman had tapped Goldman Sachs Group Inc (GS.N) and JPMorgan Chase & Co <JPM.N > to examine a possible sale or public offering, sources told Reuters in May.
Carlyle invested $1 billion in private equity in the second quarter but has since announced deals, expected to close by the end of the year, for which it will commit at least $1.6 billion, Carlyle’s co-chief executive, William Conway, told analysts on an earnings conference call on Aug 8.
This does not include its purchase of asset manager TCW Group Inc from Societe General (SOGN.PA), which was announced on August 9.
Much of Carlyle’s prolific deal activity is related to the dynamics of Carlyle Partners V, a $13.7 billion buyout fund, which the private equity firm is putting to work. The fund’s investment period runs through May 2013, Conway said.
Reporting by Soyoung Kim and Greg Roumeliotis in New York; Editing by Steve Orlofsky and Bernard Orr