Shutterstock Inc said on Tuesday (May 23) it would buy animated-images platform Giphy Inc from Meta Platforms Inc for $53 million (S$71 million) in cash, months after the Facebook owner had agreed to divest the company on competition concerns.
Britain's competition regulator last year ordered Meta to sell Giphy over fears that it could deny or limit competitors such as Snapchat Inc and Twitter access to the target's content.
Meta had reportedly paid $400 million for New York-based Giphy in 2020. A year later the deal was challenged by Britain's Competition and Markets Authority and its successful campaign was the first time a regulator had forced a US tech giant to sell an already acquired company.
Shares of Shutterstock, which expects the deal to close next month, rose as much as 4 per cent premarket.
The company said Giphy would add "minimal" revenue this year and it would launch efforts to increase revenue from 2024.
"This is an exciting next step in Shutterstock's journey as an end-to-end creative platform," said Shutterstock CEO Paul Hennessy.
Giphy boasts of the world's largest repository of animated images, popularly called GIFs, and web-based stickers which are used on platforms such as Facebook, Instagram, TikTok and Microsoft Teams.
Its content, which also includes official submissions from media firms such as Disney and Netflix, garners 15 billion daily impressions.
The Giphy deal will allow access to about 1.7 billion daily users, Shutterstock said.