Sources tell me that Corbis representatives will be meeting with Visual China Group (VCG) next week in Beijing to discuss the Visual China’s possible acquisition of all, or part, of Corbis.
Visual China represents Getty Images in China at
www.gettyimages.cn. At one point Getty was a partner with VCG, but given Chinese law VCG was forced to buy out Getty’s shares in order to become a public company in China. VCG also entered into an
arrangement with 500px () in July.
VCG is currently valued at about $3.4 Billion on the Shanghai stock exchange, but gross revenue of the company is only about $60 million. A significant part of the company’s revenue comes from consulting arrangement. It is believed that less than $20 million of their annual revenue comes from image licensing.
The company does have about $100 million in cash and a line of credit of approximately $200 million. As with all public companies in China, it is 100% owned by Chinese.
Knowledgeable sources indicate that in order to enhance the company’s stock value they need some type of compelling “story” during the next two years. An acquisition of Bill Gates’ company would certainly provide that story.
In early November Bloomberg reported that Corbis has been making
major cuts to staff. In October there were
rumors in New York that Corbis is up for sale and that Shutterstock was an interested suitor.
Sources estimate that Corbis’ licensing revenue is less that $100 million and declining. The strongest segment of the business is editorial which probably represents something in the range of $50 million of the total revenue. Corbis acquired
Splash News in 2011 and most believe it has grown Corbis’ editorial business since then.
The commercial, creative side of the Corbis business is believed to be in serious decline. They have been adding very few new images to the collection.
There are also indications that Corbis would like to hold onto the Entertainment Division of the business that does custom portrait shoots with entertainers. CEO Gary Shenk would also like to continue to operate the rights clearance segment of Corbis’ business.
Finally, there are rumors that VCG has approached Getty (i.e. Carlyle Group) about joining them in funding the acquisition of Corbis. Certainly, Getty doesn’t have the funds to get involved in such an acquisition, but Carlyle could easily raise the funds. Carlyle may want to get a foothold in the Chinese market. On the other hand, does Carlyle want to get more deeply involved in the stock photo business.