AppLovin (APP) makes an offer to acquire Video Game Maker Unity (U)

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AppLovin (NASDAQ:APP) has made an offer to acquire Unity Software Inc. (NYSE:U) in an all-stock transaction, it was disclosed on Tuesday.

AppLovin said it made an offer in which each outstanding share of Unity common stock would be exchanged for 1.152 AppLovin Class A voting common stock and 0.314 AppLovin Class C non-voting common stock.

AppLovin is looking to capitalize on the growing demand for three-dimensional games, with the two companies creating software to design video games.

Over 50% of the world’s video games are made with Unity, including “Call of Duty: Mobile” and “Pokemon Go.” Meanwhile, AppLovin helps developers scale and monetize their apps.

“We believe that together, AppLovin and Unity are creating a market-leading business that has tremendous growth potential that would generate an estimated adjusted EBITDA of over $3 billion by the end of 2024 and would be in the best interests of shareholders of both companies,” said Adam Foroughi, CEO of AppLovin. “Over the past decade, we’ve built and operated a leading and innovative company in mobile app marketing and monetization solutions. Unity is one of the world’s leading platforms for helping creators transform their inspirations into real-time 3D content.”

AppLovin said the deal will bring value to shareholders of both companies, including scale, value creation and the ability to make strategic investments.

Shares of Unity jumped more than 6% at the news, while AppLovin is down more than 12%.

By Sam Boughedda

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