SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 9, 1998
Getty Images, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 0-28586 98-0177556
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
122 South Michigan Avenue, Suite 900
Chicago, Illinois 60603
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 644-7880
None
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(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On February 9, 1998, Getty Communications plc, a company organized
under the laws of England and Wales ("Getty Communications"), completed the
previously announced merger transactions between Getty Communications and
PhotoDisc, Inc., a Washington corporation ("PhotoDisc"). PhotoDisc is a leader
in the development and marketing of digital stock photography products and
electronic delivery of images. The transactions were completed pursuant to
the Merger Agreement (the "Merger Agreement"), dated as of September 15, 1997,
among Getty Images, Inc., a Delaware corporation ("Getty Images"), Getty
Communications, PhotoDisc and Print Merger, Inc., a wholly owned subsidiary
of Getty Images ("Merger Sub").
The merger transactions were approved by the shareholders of
each of Getty Communications and PhotoDisc on January 30, 1998. Pursuant to
the transactions, Getty Communications formed Getty Images as the new U.S.
holding company for Getty Communications and PhotoDisc. Ordinary shares of
Getty Communications (including ordinary shares underlying Getty
Communications American Depositary Shares ("ADSs")) were converted into
approximately 19.2 million shares of Getty Images common stock. In
accordance with the previously announced terms for the transactions, one
share of Getty Images common stock was issued for every two ordinary shares
of Getty Communications (one share of Getty Images common stock for each
Getty Communications ADS). In addition, PhotoDisc was merged with and into
Merger Sub, a wholly owned subsidiary of Getty Images. Getty Images issued
approximately 8.1 million shares of Getty Images common stock to the former
holders of shares of PhotoDisc common stock in exchange for all of the issued
and outstanding shares of PhotoDisc common stock (of which approximately 1.0
million shares were placed in escrow by certain former principal stockholders
of PhotoDisc to secure certain indemnification of obligations). In addition,
Getty Images paid approximately $39.6 million in cash to the former holders
of shares of PhotoDisc common stock and holders of options to purchase
PhotoDisc common stock. Holders of options to purchase shares of PhotoDisc
common stock also received options to purchase up to an aggregate of
approximately 1.8 million shares of Getty Images common stock on terms
adjusted to reflect the PhotoDisc exchange ratio. The consideration paid to
the former PhotoDisc stockholders and optionholders was based on, among other
things, the average closing price of Getty Communications ADSs on the Nasdaq
National Market during the ten trading days prior to February 9, 1998, which
was $18.4375.
Descriptions of PhotoDisc and the transactions were included in
the Registration Statement on Form S-4 (No. 333-38777) filed by Getty Images
with the Securities and Exchange Commission (as amended, the "Registration
Statement") in connection with the meetings of shareholders of Getty
Communications and PhotoDisc that were required to approve the transactions.
As a result of the merger, Getty Images has become the successor
to Getty Communications. Trading in Getty Communications ADSs on the Nasdaq
National Market (NASDAQ: GETTY) has been terminated and trading has commenced
in shares of Getty Images common stock on the Nasdaq National Market (NASDAQ:
GETY). Registration of the Getty Communications ordinary shares and ADS
under the Securities Exchange Act of 1934, as amended, will be terminated.
Also on February 9, 1998, Getty Investments L.L.C. ("Getty
Investments") completed its subscription for 1,518,644 shares of Getty Images
common stock at a purchase price of $18.4375 per share or an aggregate of $28
million.
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On February 9, 1998, Getty Images and Getty Communications also
completed the acquisition of all of the issued and outstanding shares of
Allsport Photographic plc ("Allsport"). Allsport is a leading sports
photographic agency, whose customers include major newspaper groups worldwide,
publishers, sports governing bodies and sponsors. In this transaction, Getty
Images issued an aggregate of 1,137,916 shares of Getty Images common stock to
certain of the former Allsport shareholders and Getty Communications paid an
aggregate of approximately L16.5 million in cash to the former Allsport
shareholders. The former Allsport shareholders are the founders and senior
managers of Allsport. A copy of the acquisition agreement is attached to this
Report on Form 8-K as Exhibit 2.2.
Upon completion of the above transactions, approximately 29.9
million shares of Getty Images common stock were outstanding as of February
9, 1998.
To finance in part these transactions, on February 9, 1998,
Getty Images, Getty Communications and certain of their subsidiaries entered
into a credit agreement (the "Credit Agreement") with Midland Bank plc as
arranger, the banks named therein (the "Banks"), and HSBC Investment Bank plc
as security agent and facility agent. Pursuant to the Credit Agreement, the
Banks granted to Getty Images, Getty Communications and certain of their
subsidiaries (i) a $24.0 million term loan facility (the "Tranche A
Facility"), (ii) a L16.0 million multicurrency term loan facility (the
"Tranche B Facility") and (iii) a L6.75 million revolving credit facility
(the "Tranche C Facility"). The obligations of the borrowers under the
Credit Agreement are secured by guarantees by certain subsidiaries of Getty
Images, pledges of the shares of certain subsidiaries of Getty Images and
other security. On February 9, 1998, Getty Images borrowed $24.0 million
under the Tranche A Facility and L16.0 million under the Tranche B Facility.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Financial statements of PhotoDisc as of and for the years ended
December 31, 1994, 1995 and 1996 and as and for the nine months ended September
30, 1997 were included in the Registration Statement.
Financial statements of Allsport required pursuant to Item 7(a)
of Form 8-K will be filed by amendment within 60 days of the filing of this
Report on Form 8-K.
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(b) Pro Forma Financial Information
Pro forma financial information reflecting the planned
acquisition of PhotoDisc on the basis of certain assumptions was included in
the Registration Statement.
Pro forma financial information required pursuant to Item 7(b)
of Form 8-K in connection with the acquisition of Allsport will be filed by
amendment within 60 days of the filing of this Report on Form 8-K.
(c) Exhibits
2.1 Merger Agreement dated as of September 15, 1997 among Getty
Images, Getty Communications, PhotoDisc and Merger Sub
(incorporated by reference to Exhibit 10.1 of the
Registration Statement on Form S-4 (No. 333-38777) filed by
Getty Images with the Securities and Exchange Commission, as
amended).
2.2 Agreement for the sale of the whole of the issued share
capital of Allsport Photographic plc dated February 6, 1998
among Getty Images, Getty Communications and Stephen Michael
Powell and others named therein.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
As described under Item 2 above, on February 9, 1998, Getty Images
and Getty Communications completed the acquisition of all of the issued and
outstanding shares of Allsport. In connection with this acquisition, Getty
Images issued an aggregate of 1,115,784 shares of Getty Images common stock to
four former shareholders of Allsport pursuant to Rule 903 of Regulation S
("Regulation S") under the Securities Act of 1933, as amended (the "Securities
Act").
The issuance of such shares to such persons was made in an
offshore transaction within the meaning of Regulation S and no directed
selling efforts were made in the United States in connection with such
issuance. Each of such persons agreed not to sell or otherwise transfer any
of the shares of Getty Images common stock received in connection with the
acquisition, except with the prior written consent of Getty Images and Getty
Communications or to certain persons who agree to be bound to such
restrictions, until the earlier of (i) the date of the publication of the
audited financial statements of Getty Images for the year ending December 31,
1998 and (ii) April 30, 1999. Each of such persons also represented and
warranted to Getty Images and Getty Communications, among other things, (i)
that such person was not a U.S. person and was not acquiring shares for the
account or benefit of any U.S. person, (ii) that neither such person nor any
of its affiliates engaged in any directed
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selling efforts with respect to such shares and that such persons will comply
with the offering restrictions requirements of Regulation S, (iii) that such
person acknowledged that the issuance of such shares was not registered under
the Securities Act and that there were restrictions on the resale of such
shares, (iv) that such person was purchasing such shares for his own account for
investment and not with a view to distribution and (v) that such person
understood that a legend referring to applicable transfer restrictions would be
placed on certificates representing such shares.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
GETTY IMAGES, INC.
Date: February 24, 1998 By: /s/ Lawrence Gould
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Lawrence Gould
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EXHIBIT INDEX
Exhibit
Number Description
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2.1 Merger Agreement dated as of September 15, 1997 among Getty
Images, Getty Communications, PhotoDisc and Merger Sub
(incorporated by reference to Exhibit 10.1 of the
Registration Statement on Form S-4 (No. 333-38777) filed by
Getty Images with the Securities and Exchange Commission, as
amended).
2.2 Agreement for the sale of the whole of the issued share
capital of Allsport Photographic plc dated February 6, 1998
among Getty Images, Getty Communications and Stephen Michael
Powell and others named therein.