Unity have just announced they are merging with the app management and monetization company IronSource. This comes after a very busy couple years at Unity, following their successful IPO in 2020, their acquisition of Weta Digital and Parsec followed by major staff layoffs just a few weeks ago.
Details of the Unity + IronSource merger from Barrons:
Unity Software U –18.13% will take over IronSource IS +50.90% in an all-stock $4.4 billion merger deal—and investor sentiment on the two companies have diverged in a big way on the news.
The two groups announced that they have reached a definitive agreement under which IronSource (ticker: IS) will become a wholly-owned subsidiary of Unity (U) in a deal that will see each share of IronSource exchanged for 0.1089 shares of its new parent. Unity stockholders will own almost 74% of the combined company following the merger.
Shares in Unity, a software group chiefly focused on video games, slumped 7% in U.S. premarket trading on Wednesday, while IronSource stock soared 52% higher. IronSource is an Israeli software group that primarily allows mobile content creators to scale their apps and businesses.
Valued at $4.4 billion, the deal represents a 74% premium to the 30-day average exchange ratio, the groups said. Unity’s board has also authorized a share buyback program of up to $2.5 billion once the transaction is closed.
This acquisition will create a large amount of overlap between IronSource products and Unity’s existing offerings, which generally leads to additional layoffs. It will be interesting to see how this acquisition helps Unity’s struggling stock value going forward.
You can learn more about the Unity and IronSource merger in the video below.