Mobile app tech firm AppLovin makes $20 billion offer to acquire Unity

Shawn Knight

Posts: 14,321   +162
Staff member
TL;DR: Mobile app technology company AppLovin has submitted an unsolicited offer to purchase Unity Software. The all-stock deal would value Unity shares at $58.85 each, representing a premium of 18 percent compare to what Unity closed at on Monday afternoon and a 48 premium over share prices as of July 12.

Specifically, each share of Unity common stock would be exchanged for 1.152 shares of AppLovin Class A voting common stock and 0.314 shares of AppLovin Class C non-voting common stock.

Should the deal materialize, Unity shareholders would receive about 55 percent of the outstanding shares of the combined company. The total enterprise value of the deal is around $20 billion.

AppLovin CEO Adam Foroughi believes the combined company would have tremendous growth potential, and could generate estimated earnings of over $3 billion by the end of 2024. AppLovin further proposes that current Unity chief John Riccitiello serve as CEO of the combined company, with Foroughi serving at COO. The board of directors would also be realigned to allow Unity to appoint the majority of members, consistent with its economic stake.

AppLovin was founded in 2012 and operated in stealth mode until 2014. The company helps developers market and monetize their apps as well as analyze reach, and they also operate a mobile gaming publishing studio called Lion Studios.

The offer highlights an ongoing effort to consolidate the gaming industry through mega mergers. In late 2020, Microsoft agreed to buy ZeniMax for $7.5 billion and Take-Two Interactive scooped up developer Zynga for $12.7 billion this past January. A week later, Microsoft announced a monster $68.7 billion buyout of Activision Blizzard. Sony responded by purchasing Bungie for $3.6 billion.

Regulators from the US and the UK are taking a close look at Microsoft's planned purchase of Activision Blizzard to ensure it does not violate any anti-competitive practices. The CMA's investigation will put the acquisition on ice until at least September 1 but the FTC's examination could drag things out well beyond that deadline.

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Gars

Posts: 316   +29
Regulations r on the big cake too
(or on another or so form)

we r the big winner (sigh)
its time to give up huh
 

toooooot

Posts: 1,620   +825
I feel clueless, but how the heck would mobile app tech replenish this huge sum back?
If I remember correctly, cryengine balanced on a verge of bankrupcy for a logn time.
What makes unity different? Is it that much better?
 

Theinsanegamer

Posts: 3,522   +5,928
I feel clueless, but how the heck would mobile app tech replenish this huge sum back?
If I remember correctly, cryengine balanced on a verge of bankrupcy for a logn time.
What makes unity different? Is it that much better?
We can take unity, require people to pay for licenses, then jack up the price. GENEUS!

Wait why is everyone leaving? Guys?
Regulations r on the big cake too
(or on another or so form)

we r the big winner (sigh)
its time to give up huh
The game development industry has incredibly low barrier to entry. There is nothing stopping you or anyone else from making video games, often for free.

Purchasing unity is a bit odd, since its a game engine and not a developer.
 

dangh

Posts: 671   +1,044
I feel clueless, but how the heck would mobile app tech replenish this huge sum back?
If I remember correctly, cryengine balanced on a verge of bankrupcy for a logn time.
What makes unity different? Is it that much better?
huge number, if no majority of applications use Unity as their engine.
This is a huge amount of fees and in addition complete advertisement platform.
Number of users will only grow. Add your adds to the Unity and you can get some good return.

What is more irritating here, seems we are going to see more and more consolidation in gaming. It will be same as at any other market, where just a few companies owns nearly all TMs around - another Nestle, ffs. And that will dramatically reduce competition on the market, because smaller player will either die or survive on crumbs.
 

Hodor

Posts: 113   +67
That's a very bad idea. They will get their money back by screwing up the competition. Unity will become crap. They'll probably have dual release, one with extra functionality for themselves and a much crappier version for everyone else. Good news for Unreal Engine, but not for current users of Unity.