10:36 AM EST, 01/07/2025 (MT Newswires) -- Getty Images ( GETY ) and Shutterstock ( SSTK ) said Tuesday they agreed to combine in a merger of equals to create a visual content company with an enterprise value of about $3.7 billion.

For each share owned in Shutterstock ( SSTK ), investors can choose to receive either about $28.85 in cash or roughly 13.67 of Getty's shares, with a third option covering mixed consideration of 9.17 Getty shares and $9.5 in cash, according to a joint statement. Shutterstock ( SSTK ) shares jumped 23% in Tuesday trading, while Getty surged 26%.

In aggregate, Getty is set to pay Shutterstock ( SSTK ) $331 million in cash and 319.4 million of its shares under the terms of the transaction. The deal requires regulatory clearance and approval from the companies' stockholders and is subject to the extension or refinancing of Getty's existing debt.

Getty's shareholders will own roughly 54.7% of the combined company after the transaction is completed, while Shutterstock ( SSTK ) will hold the remaining stake. The merged entity will be named Getty Images Holdings ( GETY ) and continue to trade under the GETY ticker on the New York stock exchange.

"With the rapid rise in demand for compelling visual content across industries, there has never been a better time for our two businesses to come together," Getty Chief Executive Craig Peters said. "By combining our complementary strengths, we can better address customer opportunities while delivering exceptional value to our partners, contributors, and stockholders."

On a pro-forma 2024 basis, the combined company is expected to have revenue between $1.98 billion to $1.99 billion, including 46% of subscription sales. The deal is estimated to be accretive to earnings and cash flow in the second year and result in annual cost synergies between $150 million and $200 million within the first three years of completion, according to the companies.

"We expect the merger to produce value for the customers and stockholders of both companies by capitalizing on attractive growth opportunities to drive combined revenues, accelerating product innovation, realizing significant cost synergies and improving cash flow," Shutterstock ( SSTK ) CEO Paul Hennessy said. "We look forward to working closely with the Getty Images ( GETY ) management team to complete the transaction and drive the next chapter of growth."

Peters will lead the combined company as CEO, while Getty Chairman Mark Getty will serve in the same role. The company's board of directors will include Peters and Hennessy.

Price: 3.61, Change: +1.04, Percent Change: +40.43