Liquidation of Co Kerry companies to net Getty €124m

GETTY IMAGES, the distributor of pictures and video, is poised to realise some €123.9 million through the liquidation of three companies it acquired in the buyout of Co Kerry imaging firm Stockbyte in a 2006 deal valued at €110 million.

Recent filings to the Companies Office show that Getty, which itself was sold this month to private equity firm Hellman Friedman, has initiated a voluntary liquidation procedure in three units of its main Irish holding company, Emerald Pix.

While Getty Images maintains an office in Dublin, the development follows the transfer of Stockbyte's assets and intellectual property to the parent organisation last year. The prime beneficiary of the transaction was Co Kerry businessman Jerry Kennelly, whose sale of Stockbyte was executed before a sharp deterioration in the share price of Getty Images as it faced increasing competition from low-cost online rivals.

The voluntary liquidation procedure enables Getty Images to take cash from the units in question and close them as legal entities.

The largest of the subsidiaries now in liquidation is Pixel Images Holdings, the vehicle used to effect the Stockbyte deal, which is likely to yield a surplus of €113.47 million after the payment of its debts. Another subsidiary, Star Media, is expected to yield a surplus of €8.28 million. The final subsidiary, Stockdisc, is expected to yield €2.12 million.

"Essentially this liquidation has been planned since 2007. Once we acquired Stockbyte, all the assets were moved over and the intellectual property was moved. The company is no longer in use," said a London-based spokeswoman for Getty Images.

Hellman Friedman's acquisition of Getty Images valued the company at some $2.4 billion (€1.51 billion) including debt. Shares in Getty Images had fallen by some 73 per cent in the two years preceding agreement on the transaction, which was agreed in February and closed on July 2nd.

The deal valued shares in Getty Images at $34, a 55 per cent premium on their value immediately before the company notified markets that it was exploring a potential deal.

Based in Seattle, Getty was built through a series of acquisitions of stock photography houses in the 1990s and began supplying media companies with pictures to use in adverts and magazines. It also began selling news, sports and entertainment photos and video.

Yet a shift in advertising to the internet and the growth of text-only paid-search advertisements led to a decline in volume for Getty's rights-managed still pictures. The company also faced competition from discount websites offering pictures. To offset slowing revenue growth, Getty cut jobs and consolidated offices.

Getty was reported to have attracted interest from several buyers, including private equity firms Kohlberg Kravis Roberts, Bain Capital and others. Its competitors include privately-held Corbis - controlled by Microsoft founder Bill Gates - and Jupitermedia.

This article appears in the print edition of the Irish Times