Getty acquires Digital Vision

Seattle-based Getty Images has acquired Digital Vision, estimated to be the world's third-largest stock-photography company, for $165 million in cash.

The acquisition, which closed yesterday, was important to Getty because London-based Digital Vision is a leader in the royalty-free image market, said Getty Chief Executive Jonathan Klein. Unlike traditional stock photography, which is usually purchased under a specific use agreement, royalty-free images have much broader usage allowances.

Getty already sells Digital Vision's images through a partnership formed between the two companies in 2002. Getty will integrate Digital Vision's business and in the process will lay off a significant number of Digital Vision's 130 employees, Klein said.

Royalty-free images are becoming increasingly popular, Klein said, and are more profitable for Getty because less labor and expense are involved to sell them. Much of Digital Vision's imagery is also wholly owned, which contributes to higher margins and gives Getty more licensing flexibility.

Getty also reported yesterday its first-quarter results, which included operating margins of 30 percent and record revenue of $178.1 million, up from $156.5 million during the same period last year. Profit for the quarter was a record $34.1 million, up from $26.1 million in the year-ago period.

The Digital Vision acquisition prompted Getty to up its earnings expectations for the year.

Getty previously projected full-year revenue to be in the $705 million-to-$715 million range and earnings per share of between $2.10 and $2.20.

It upped its forecast yesterday to between $720 million and $730 million in revenue and earnings per share of between $2.17 and $2.30.

Kim Peterson: 206-464-2360 or kpeterson@seattletimes.com