Recently AppLovin, the mobile technology and marketing company, unveiled a proposal unsolicited to acquire Unity Software in a stock deal valued at $17.500 billion.
AppLovin offered to pay $58,85 per share for Unity shares and in the proposed agreement, Unity would own approximately 55% of the outstanding shares of the combined company, representing approximately 49% of the voting rights of the combined company. But there is a sticking point: Unity is expected to finalize its recent merger deal with ironSource, an AppLovin competitor.
For those unaware of AppLovin, d.They should know that this offers technology to enable developers Of all sizes market, monetize, analyze and publish your applications through its MAX, AppDiscovery and SparkLabs mobile advertising, marketing and analytics platforms.
AppLovin operates Lion Studios, which works with game developers to promote and publish their mobile games. Founded in 2012, AppLovin is proud to have helped define many of the world's most popular mobile apps and game studios. The company is now trying to buy Unity to strengthen its position in the world of video games.
Adam Foroughi, CEO of AppLovin, said he believes the deal could deliver significant growth for businesses and benefit game developers.
“We believe that together, AppLovin and Unity are creating a market-leading company that has tremendous growth potential. With the scale that comes from unifying our industry-leading solutions and the innovation that would come from combining our teams, we expect game developers to be the biggest beneficiaries as they continue to lead the mobile gaming industry forward. your next chapter of growth. ," he said.
AppLovin is offering an all-stock deal and offered $58,85 per Unity share, which represents an 18% premium over Unity's Monday closing price. As a reminder, the terms “all shares deal” and “all papers deal” are often used in reference to mergers and acquisitions. In this type of acquisition, the shareholders of the target company receive shares of the acquiring company as payment, instead of cash.
The offer comes about a month after Unity announced its intention to acquire ironSource in a transaction seen as a threat to AppLovin's business. In fact, ironSource is an Israeli company that develops technologies for app monetization and distribution. The goal of the agreement with Unity is to empower ad creators, publishers and producers to have better tools at their fingertips to ensure product success and monetization. In practical terms, this will allow companies and developers to have access to ironSource's Supersonic tools in Unity.
After the announcement, AppLovin allegedly hired consultants to put together an offer to buy Unity. Under the proposed deal, Unity CEO John Riccitiello will become CEO of the combined company, while AppLovin CEO Adam Foroughi will assume the role of COO.
However, Unity's board will have to terminate the deal with ironSource if it wants to pursue a merger with AppLovin. Buying IronSource gives creators more tools to grow and monetize their apps, but buying AppLovin would offer similar benefits to developers.
Unity said its board would evaluate AppLovin's offer. But according to some, Unity should reject AppLovin's offer.
“The proposed price for Unity appears to be well below its intrinsic value and we expect Unity to reject it for this reason. We believe the interference with the ironSource acquisition is problematic and will cause the Unity board to be very careful before agreeing to an outright sale,” said Michael Pachter, an analyst at Wedbush Securities. Unity on Tuesday announced quarterly revenue of $297 million, up 9% year-over-year.
If Unity decides to withdraw from the agreement with ironSource, the latter could receive $150 million in severance pay.
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