Unity Announces Board Rejects AppLovin Proposal, Reaffirms Commitment To ironSource Transaction

Author: Bill Haddad | August 15, 2022 08:04am

ironSource Transaction Expected to Deliver Significant Benefits for Shareholders and Position Combined Company for Increased Value Creation

Unity Board Determines AppLovin Proposal Would Not Reasonably Be Expected to Result in a Superior Proposal to Unity's Agreement with ironSource

Unity (NYSE:U) (the "Company") today announced that its Board of Directors (the "Board") has completed a thorough financial and strategic evaluation of the unsolicited proposal from AppLovin (NASDAQ:APP), with the assistance of outside financial and legal advisors, and has unanimously determined that it is not in the best interests of Unity shareholders and would not reasonably be expected to result in a "Superior Proposal" as defined in Unity's merger agreement with ironSource (NYSE:IS). The Unity Board reaffirms its recommendation to Unity's shareholders to vote in favor of the previously announced ironSource transaction and recommends against the unsolicited AppLovin proposal. The Unity Board is committed to acting in the best interests of Unity shareholders with a focus on driving long-term sustainable value creation.

John Riccitiello, President and Chief Executive Officer of Unity, said, "The Board continues to believe that the ironSource transaction is compelling and will deliver an opportunity to generate long-term value through the creation of a unique end-to-end platform that allows creators to develop, publish, run, monetize, and grow live games and real-time 3D content seamlessly. We remain committed to and enthusiastic about Unity's agreement with ironSource and the substantial benefits it will create for our shareholders and Unity creators."

The ironSource Transaction Represents Outstanding Value Creation Opportunity for Unity Shareholders

• Combining Unity and ironSource will form the industry's first end-to-end platform to power creators' success as they build, run, manage, grow, and monetize live games and real-time 3D content across their lifecycle. The transaction will drive better economic outcomes for customers by bringing together the Unity game engine and editor, Unity Ads, and the rest of Unity Gaming Services (UGS) with ironSource's best-in-class mediation and publishing platforms.
• The combined company is expected to generate a run rate of $1 billion in Adjusted EBITDA by the end of 2024, and the combination is expected to generate $300 million in annual EBITDA synergies by year three.
• In connection with the merger, Unity's Board of Directors has authorized a 24-month share buyback program of up to $2.5 billion, effective upon closing of the merger.
• Unity shareholders Silver Lake and Sequoia have fully committed to purchase an aggregate of $1 billion in convertible notes from Unity at closing, demonstrating their belief in the value creation potential of the merger.

Goldman Sachs & Co. LLC and Morgan Stanley are serving as financial advisors to Unity, and Morrison & Foerster, Richard Layton & Finger and Herzog, Fox & Neeman are serving as its legal advisors.

Posted In: APP IS U