Israel-based ironSource is merging with the video game engine Unity Software. The combined company seeks to reach $1 billion in adjusted EBITDA by the end of 2024. The deal is expected to be completed before the end of the year
Silver Lake and Sequoia, the two largest Unity owners, will invest $1 billion in Unity in the form of convertible notes following the closing of the transaction.
Upon completion of the transaction, ironSource will become a wholly-owned subsidiary of Unity.
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IronSource went public on the NYSE through a SPAC merger in 2021 during the COVID-19 pandemic. It was valued at $11.1 billion, a 94% premium on its current value on the NYSE.
Currently, IronSource has a market cap of $2.28 billion. This value has decreased over two-thirds of its value over the past six months. However, for this merger, ironSource, which has a platform to help app developers with their monetization, engagement, and analytics, was valued at $4.4 billion. The company employs 1,500 people.
IronSource shareholders will hold 26.5% of the shares of the merged company in the all-stock deal.
IronSource was founded in 2010 by the company’s CEO Tomer Bar-Zeev who will serve on the board and will have three directors of the merged company.
The company has raised a total of $105 million from five investors across two funding rounds.
In October 2017 IronSource signed a deal to buy Bidalgo, an Israeli marketing software company. Bidalgo’s platform assists app marketers in driving growth by providing insight and control over their marketing expenditures.
The acquisition of Bidalgo followed ironSource’s earlier $400 million acquisition of TapJoy, an American mobile advertising and app monetization startup.
Bidalgo was its ninth purchase overall and fourth in 2021, following Soomla and Luna Labs.
Nasdaq-listed Unity is a much bigger company. Unity is presently valued at $11.8 billion, despite the fact that the firm has witnessed its share price decline by nearly 70 percent in 2022.
Unity purchased Ziva Dynamics for an unknown price earlier this year and Weta for $1.63 billion in November of last year.
Unity Software was founded in Denmark in 2004 and changed its name in 2007. The firm creates the 3D graphics engine that powers numerous famous video games, including Among Us and Hearthstone by Activision Blizzard.
The firm stated last month that it will be cutting off around 200 employees, or roughly 4 percent of its total staff.