July 13, 2022 – Unity, one of the leading platforms for creating and operating interactive, real-time 3D (RT3D) content, and ironSource, a business platform that empowers mobile content creators to turn their apps into scalable businesses, have today announced 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, where each ordinary share of ironSource will be exchanged for 0.1089 shares of Unity common stock.
According to the companies, once closed, the deal will result in current Unity stockholders owning approximately 73.5% and current ironSource shareholders owning approximately 26.5% of the combined company.
The deal will bring together the Unity game engine and editor, Unity Ads, and the rest of Unity Gaming Services (UGS) with ironSource’s mediation and publishing platforms. As a result of the merger agreement, the companies believe that their complementary offerings will create a unique end-to-end platform that will allow developers to create, publish, run, monetize, and grow live games and RT3D content seamlessly.
“We believe the world is a better place with more successful creators in it. The combination of Unity and ironSource better supports creators of all sizes by giving them all the tools they need to create and grow successful apps in gaming and other consumer-facing verticals like e-commerce,” said John Riccitiello, CEO of Unity. “This is a step further toward realizing our vision of a fully integrated platform that helps creators in every step of their RT3D journey. We look forward to welcoming Tomer Bar-Zeev, the CEO of ironSource, and the rest of ironSource’s talented team into the Unity family.”
Unity stated that together with ironSource, it will transform and streamline how live games, RT3D apps and services are made by integrating creation and growth more tightly. As a result, creators will be able to leverage data on audience feedback to improve content from the earliest stage in the creation process, and throughout the content lifecycle. This will in turn allow data from growth to feed improvements in content, which will help to drive more business success for the content or app.
“To succeed today, creators need an extensive set of solutions and products working in concert to power amazing user experiences and sustainable business growth,” said Tomer Bar-Zeev, CEO of ironSource. “The combination of Unity and ironSource brings together every product needed to power that flywheel of growth, in a differentiated platform positioned to lead our category and beyond. We couldn’t be more excited about our shared mission to remove obstacles for creators to grow.”
Unity also noted that in addition to delivering benefits for creators, the transaction will also provide significant benefits to shareholders. The combined company is expected to generate a run rate of USD $1 billion in Adjusted EBITDA by the end of 2024, according to Unity.
“Beyond our platform, we expect the combination of our business with ironSource to transform Unity’s financial profile to that of a highly profitable and free cash flow positive company,” said Luis Visoso, CFO, Unity. “We expect to generate $300 million in annual EBITDA synergies by year three.”
The proposed all-stock transaction has been approved by the boards of directors of both companies, and is expected to close during Unity’s fourth quarter of 2022. 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. Two additional ironSource Directors will also 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.
For full details of the merger agreement, click here.
Image credit: Unity / ironSource
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Sam is the Founder and Managing Editor of Auganix. With a background in research and report writing, he has been covering XR industry news for the past five years.