NEW YORK - Shutterstock , Inc. (NYSE: NYSE:SSTK), a global provider of creative content, has announced an agreement to purchase Envato Pty Ltd., an Australian company known for its digital creative assets and templates. The acquisition, valued at $245 million in cash, is expected to more than double Shutterstock's subscription base and significantly expand its content offerings.
Envato, established in 2006, has developed a strong presence in the creative asset domain with a subscriber base of 650,000. The company's flagship subscription service, Elements, offers unlimited downloads across various asset types, which complements Shutterstock's existing content library. Shutterstock's CEO, Paul Hennessy, expressed enthusiasm about the acquisition, stating that it aligns with the company's mission to provide customers with the content they need.
The transaction is set to enhance Shutterstock's content revenue from videos, audio, graphics, fonts, and templates, adding 10 million images, 6 million videos, 1 million audio clips, 0.5 million templates, and 0.2 million graphics & fonts to its library. The deal also diversifies Shutterstock's portfolio into new content types, including code & web themes and product mock-ups.
Envato CEO Hichame Assi highlighted the company's success in generating over $1.3 billion for its author community and scaling to a significant global subscriber count. The acquisition is anticipated to accelerate Shutterstock's progress towards its 2027 long-term targets, with Envato expected to contribute 20% to annual revenues and 15% to annual adjusted EBITDA.
The acquisition is financed through a $375 million credit facility and is expected to close in the third quarter, subject to customary closing conditions. Bank of America, Citigroup, Wells Fargo, and Citizens are providing the financing, with CapM Advisors and White & Case LLP serving as Shutterstock's financial and legal advisors, respectively.
This strategic move is based on a press release statement and marks a significant expansion for Shutterstock in the competitive market of digital creative content.
InvestingPro Insights
Shutterstock's strategic acquisition of Envato Pty Ltd. is poised to strengthen its market position and financial metrics. According to InvestingPro data, Shutterstock (NYSE: SSTK) holds a market capitalization of $1.51 billion, with a healthy Price/Earnings (P/E) ratio of 14.21, indicating a potentially attractive valuation compared to its earnings.
The company's P/E ratio for the last twelve months as of Q4 2023 is slightly higher at 15.53, yet it remains appealing when factoring in near-term earnings growth prospects.
InvestingPro Tips reveal that Shutterstock has demonstrated financial prudence by maintaining more cash than debt on its balance sheet, which is a reassuring sign for investors concerned about financial stability, especially in the context of the recent acquisition.
Furthermore, Shutterstock has a track record of rewarding shareholders, having raised its dividend for 4 consecutive years, with a notable dividend growth of 25% in the last twelve months as of Q4 2023. This consistent increase in dividends could be a sign of confidence in the company's future cash flows and profitability.
For those seeking more comprehensive analysis and additional insights, there are 6 more InvestingPro Tips available for Shutterstock at InvestingPro. To enhance your investing strategy with these exclusive tips, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.