King & Wood Mallesons advises Australian digital creative company on major private M&A transaction

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King & Wood Mallesons advises Australian digital creative company on major private M&A transaction


King & Wood Mallesons advises Australian digital creative company on major private M&A transaction


Amid ongoing challenges in the technology sector, the USD 245 million deal highlights continuing dem…

Amid ongoing challenges in the technology sector, the USD 245 million deal highlights continuing demand for unique high quality tech businesses.

On 7 May 2024, international law firm King & Wood Mallesons (KWM) announced its role in guiding Australian digital creative company Envato on its sale to Shutterstock, a US-based global creative company.

The cross-border, multi-practice team at KWM was headed by M&A partner Anthony Boogert and tax partner Kai-Chen Lamb. The pair were supported by tax senior associates James Gould and Victoria Lanyon, and M&A senior associate Johnson Pang, alongside M&A solicitors Iris Lo, Hae Soo Park and Sophie Broadley. The team worked closely with American multinational law firm Goodwin, US and UK counsel for Envato, and also received additional support from KWM partner Lisa Huett and special counsel Jessica Waters, who provided regulatory advice on competition aspects of the transaction.

Commenting on the deal, Boogert reflected: “This is a major private M&A transaction and highlights the strength of Australian creative tech companies. It shows that amid major consolidation and change in the technology industry driven by AI, there will continue to be strong demand for companies that have built strong returns and customer bases – in this case by helping people create, build and share their ideas.”

The deal, valued at USD 245 million, is expected to accelerate Shutterstock’s achievement of its 2027 long-term targets, with Envato set to add 20% to the company’s annual revenues and 15% to its annual adjusted EBITDA. The acquisition will add Envato’s 650,000 subscribers to Shutterstock’s subscriber base, doubling it to 1.15 million. Envato’s digital creative product offerings include video, audio, graphic, fonts and templates, enabling Shutterstock to further diversify into new content types, including code and web themes, templates, product mock-ups and fonts.

“Thrilled” about the transaction, Shutterstock CEO Paul Hennessy commented: “This acquisition will pave the way for our expansion into new products, audiences and content types. It also will propel us further into the dynamic Asia Pacific region, making a significant step toward achieving our future growth plans.”

CEO of Envato, Hichame Assi, spoke of being “immensely proud” of his team’s work over the years in setting the company up for the future. He added: “Together with Shutterstock, we remain steadfast in our commitment to listening to the needs of our creative community, fostering innovation and providing an environment where creativity thrives.” 

The transaction is expected to close in the third quarter of 2024, subject to customary closing conditions.

The Bank of America, Wells Fargo, Citigroup and Citizens will provide financing for the transaction. Shutterstock was advised financially on the transaction by CapM Advisors, whilst international law firm White & Case acted as a legal advisor to the company. Financial advice was provided to Envato by Drake Star Partners.

 

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