* KKR, TPG among buyout groups vying for Getty-sources
* Second round of auction underway-sources
July 3 Private equity firm Hellman & Friedman
LLC is pushing ahead with a $4 billion sale of Getty Images Inc,
the largest supplier of stock photos, video and other digital
content, to private equity, two people familiar with the matter
said on Tuesday.
While several private equity firms, such as Bain Capital
LLC, have balked at Hellman's $3.5 billion to $4 billion price
expectations, other buyout groups, including KKR & Co LP and TPG
Capital LP, are still in the process, which is now in the second
round, the sources said.
Hellman, which bought a majority stake in Getty in 2008 in a
$2.4 billion deal, tapped Goldman Sachs Group Inc and
JPMorgan Chase & Co to examine a possible sale or public
offering, a person close to the matter told Reuters in May.
The business has seen little growth in earnings before
interest, tax, depreciation and amortization (EBITDA) since
Hellman bought it but has enjoyed increasing demand for its
online imagery products and services. This could lead to Getty
fetching a higher EBITDA valuation multiple, the sources said.
Representatives of Getty and Hellman did not respond to a
request for comment while KKR, TPG and Bain declined to comment.
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.
In credit notes in March, ratings agency Moody's said
Getty's latest dividend recapitalization led to a "moderately
high" debt-to-EBITDA leverage of 4.4 times compared to 3.5 times
pre-dividend. Getty had revenues of about $945 million in 2011.
Still some buyout firms may be willing to leverage Getty's
cyclical business significantly to exploit the shift from print
to online media. KKR showed its appetite for such companies last
month, investing $150 million in New-York based image database
The Wall Street Journal reported on the progress of Getty's
sale earlier on Tuesday.