Unity Software Wholly-owned Subsidiary To Merge With IronSource In All-stock Deal

(RTTNews) - Video game software development firm Unity Software Inc. (U) and Israeli mobile content creator software developer ironSource (IS) announced Wednesday that they have entered into a definitive agreement under which ironSource will merge into a wholly-owned subsidiary of Unity via an all-stock deal.

Under the deal, each ordinary share of ironSource will be exchanged for 0.1089 shares of Unity common stock. Once closed, current Unity stockholders will own approximately 73.5% and current ironSource shareholders will own approximately 26.5% of the combined company.

The companies' complementary offerings create a unique end-to-end platform that allows creators to create, publish, run, monetize, and grow live games and real-time 3D (RT3D) content seamlessly.

The combined company is expected to generate a run rate of $1 billion in Adjusted EBITDA by the end of 2024.

In connection with the merger, Unity's Board of Directors have also authorized a 24-month share buyback program of up to $2.5 billion, effective upon closing of the merger, which is expected to reduce dilution caused by the transaction.

Upon closing of the merger, Tomer Bar-Zeev will join Unity's Board of Directors and serve as a key member of Unity's executive leadership team. In addition, two additional ironSource Directors will join the Unity Board of Directors upon closing of the transaction.

ironSource's headquarters in Israel will serve as an additional global hub for Unity.

The proposed all-stock transaction has been approved by the boards of directors of both companies, is expected to close during Unity's fourth quarter of 2022 and is subject to customary closing conditions, and regulatory and shareholder approval.

In connection with the merger announcement, ironSource reaffirms second quarter and full-year 2022 guidance. Meanwhile, Unity expects its second quarter financial results to be slightly higher than the top end of the guidance range. It is adjusting its full-year revenue guidance to $1,300 million to $1,350 million from $1,350 million to $1,425 million.