The proposal from AppLovin calls for the termination of Unity Software’s previously announced $4.4bn merger deal with ironSource


AppLovin proposes to acquire Unity Software in an all-stock deal. (Credit: Marius Berthelsen from Pixabay)

AppLovin, a mobile technology company, has offered to acquire Unity Software, a California-based video game software development company, in an all-stock deal worth $17.54bn.

Both the firms are publicly listed in the US.

Unity Software serves as a platform for developing and running interactive, real-time 3D content. Its platform offers a set of software solutions to build, run, and monetise interactive, real-time 2D and 3D content for mobile phones, PCs, tablets, consoles, as well as augmented and virtual reality devices.

AppLovin has developed a marketing software platform that offers an integrated set of solutions to app developers to solve their mission-critical functions such as acquisition of users, monetisation, and measurement.

According to AppLovin, the audience reach of Unity Software via games built on Create Solutions coupled with its own AXON machine learning engine will result in substantial efficiency gains for the combined growth platform, thereby leading to gains in revenues.

AppLovin CEO Adam Foroughi said: “Over the last decade we have built and operated a leading and innovative company in mobile app marketing and monetisation solutions. Unity is one of the world’s leading platforms for helping creators turn their inspirations into real-time 3D content.

“With the scale that comes from unifying our leading solutions and innovation that would be achieved with the combination of our teams, we expect that game developers would be the biggest beneficiaries as they continue to lead the mobile gaming sector to its next chapter of growth.”

As per the terms of the non-binding proposal, AppLovin is offering 1.152 of its shares for each share of Unity Software. This would give Unity Software’s current shareholders nearly 55% stake in the combined company, while the remaining 45% will be held by AppLovin’s shareholders.

AppLovin proposed that Unity Software’s CEO John Riccitiello can continue in the same role at the enlarged company after the closing of the deal.

The offer from AppLovin comes almost a month after Unity Software signed a $4.4bn merger deal with ironSource, a publicly-listed business platform in the US that helps mobile content creators in monetising their apps.

IronSource and AppLovin are rivals in helping app developers grow their businesses with their services.

AppLovin’s proposed deal calls for the scrapping of Unity Software’s proposed merger with ironSource.