Stock image company Shutterstock, Inc. (NYSE: SSTK) is set to acquire another stock media company, Pond5, in a deal that will help create the world’s largest video marketplace and further strengthen Shutterstock’s market position, thus allowing Shutterstock to scale its business and expand its content offerings.
The May 11 deal is a $210 million cash transaction. Pursuant to the deal, there is a $1.05 million indemnity cap, the equivalent of 0.5% of the transaction value. According to the filings, to finance the transaction, Shutterstock has borrowed $50 million. Additionally, the companies have complementary customer bases. The transaction is expected to be immediately accretive to 2022 adjusted EBITDA.
“The acquisition of Pond5 provides immense value for our global customer base, with unparalleled access to one of the largest collections of editorial and commercial video content in the world,” Jon Oringer, Interim Chief Executive Officer at Shutterstock, said in a press release. “Our contributors will also benefit from having their work showcased on Pond5’s platform, expanding their portfolio to new customers.”
According to the filings, Pond5 is a leading marketplace for stock, royalty free and editorial images and video content with customers such as Netflix, Disney, NBC, BBC, Discovery Channel and The Wall Street Journal. Its portfolio includes a collection of “30 million licensable video clips, 1.6 million music tracks and 1.7 million sound effects assets.” Additionally, Pond5 has more than 115,000 contributors in 180 countries that are creating and uploading more than 2.5 million assets each month
The companies state that together, Pond5 will be integrated with Shutterstock’s workflow and the new combined content library will expand its offerings to customers and provide content creators with a larger distribution for their content. Moreover, Pond5’s premium editorial partners like Reuters, PA Media and British Movietone “will provide Shutterstock’s global customer community access to up-to-the-minute and archival news footage.”
“We could not be more thrilled to join forces with Shutterstock to lead the video and music space,” Tom Crary, CEO at Pond5 said in a press release. “Our combined editorial offerings will be a competitive force in the market, and offer additional choice to customers with highly exclusive editorial video content.”
On May 9, 2022, Shutterstock’s Board of Directors appointed Paul J. Hennessy as the new Chief Executive Officer effective July 1, 2022. He has served on the Board since April 2015 and since June 2015 served as the CEO and board member of online pre-owned car retailer Vroom, Inc.
The companies did not disclose when the deal is expected to close.
Goodwin Procter LLP is serving as legal counsel to Pond5 and Jeffries is serving as its financial advisor. Cahill Gordon & Reindel LLP is serving as legal counsel and CapM Advisors is serving as financial advisor to Shutterstock.
Prior to the announcement, Shutterstock’s stock was valued at $64.23 on May 10. When the deal was announced on May 11, its stock closed at $62.15. A few days later, on May 16, stocks closed at $62.08.
This transaction follows Shutterstock’s acquisition of AI-driven music platform Amper Music in 2020 for an undisclosed amount and its 2021 acquisition of Turbosquid, a stock 3D modeling company. The acquisition of Pond5 will also help Shutterstock stay competitive with companies like Adobe with its collaboration with rights-free music from Epidemic Sound and Jamendo and its 2021 acquisition of cloud-based video collaboration platform Frame.io.