356 GETTY ACQUIRES TIB-UK OFFICE
November 21, 2000
Getty Images acquired all the outstanding shares of Cass & Cass Limited (TIB-UK) on
September 20, 2000 according to the 3rd Quarter 10Q filed with the SEC. They paid $6.3
million in cash and 247,790 shares worth $10.4 million to Cass & Cass Ltd. for a total
of $17.1 million, including the costs of acquisition.
Companies House in the UK which provides detailed annual accounting figures of Limited
companies shows that the gross turnover (annual income) for Cass & Cass in 1999 was
6,741,654 pounds. If we assume an average annual exchange rate of 1.45 pounds to the
dollar this is equivalent to about $9,775,398 U.S.
An interesting number for photographers is the "Cost of Sales" which includes the amount
of the gross revenue paid to TIB (now Getty Images). The cost of sales was 3,054,394
pounds. This number certainly includes everything that was paid to TIB in the U.S. and
it may include some other costs such as depreciation. This number is only slightly over
45% of the total revenue collected.
TIB-UK retains 40% of the gross fee collected for still photo sales and remits 60% to
TIB headquarters. They retain a lesser percentage of the footage sales. If all of the
3,054,394 is fees paid to headquarters (TIB or Getty) then the total gross sales this
number is calculated on would be no more than 5,090,656 pounds. It may be significantly
less depending of the proportion of these sales that are for footage. Sources in the
United Kingdom believe that only about 2.5 million pounds of the gross revenue comes
from licensing still images. If this is true, footage sales would be slightly above 2
million pounds leaving another 2 million pounds unaccounted for.
During 1999 Cass & Cass operated a scanning bureau and earned income from their own
wholly owned imagery. In addition they may have been charging research fees, service
fees, delivery fees, etc. that were not shared with TIB or the image creators. These
factors may account for the additional 2 million in revenue.
Wholly owning such an operation greatly improves the gross sales on the Getty Images
balance sheet. If 2000 sales were flat Getty would have only recognized 3,054,394
pounds in revenue when TIB-UK was a separate company. Now, with no increase in sales
they get to recognize 6,741,654, a 120% growth in annual revenue from this division of
In the 4th quarter of 2000 Getty's annual revenue from this acquisition should increase
by at least $1.3 million (1/4 of $5.25 million) if they have zero increase in sales.
In 1998 the Cass & Cass' Cost of Sales was 3,040,810 pounds. This would be about
$4,409,174 U.S. TIB (parent company) reported that their total sales in Europe in 1998
were $29,932,759. Thus, the UK market made up about 14.7% of their total European
Interestingly, the figures in the Companies House report for "Profit On Ordinary
Activities Before Taxation" was 1,171,055 pounds. Thus, the $17.1 million U.S. would
have been about 10 times gross annual profits which it is my understanding from talking
to people in the investment community is a reasonable multiple for the price being paid
for companies with profits and good growth prospects.
Prior to this sale Mark Cass was director of photography for TIB in New York. We
understand that he is no longer with the company and is moving back to the UK to live.
Mark Cass remains at TIB/Getty until the end of 2000 as
VP/Marketing for the TIB Brand. He also will continue
to live in NYC, in a newly purchased apartment after
selling his home in London.