Gaming software company AppLovin Corp (NASDAQ: APP) on Tuesday made an offer to buy Unity Software Inc (NYSE: U) for $17.54 billion to tap into growing demand for three-dimensional gaming.
AppLovin and Unity make software to design video games, which has been expanding to new technologies and coping with metaverse or immersive virtual worlds.
Unity’s software has been used to build some of the most popular games, like “Call of Duty: Mobile” and “Pokemon Go”, while AppLovin helps developers grow and monetize their apps.
Palo Alto-based AppLovin said in an all-stock deal it would value Unity at $58.85 per share and $20 billion enterprise value, representing an 18% premium to Unity’s Monday closing price.
Under the proposed deal, Unity will own 55% of the combined company’s outstanding shares, representing about 49% of the voting rights.
AppLovin CEO Adam Foroughi said the combined company will have the potential to generate an adjusted operating profit of over $3 billion by the end of 2024.
“Unity is one of the world’s leading platforms for helping creators turn their inspirations into real-time 3D content,” Foroughi said.
AppLovin, which is backed by KKR and Co (NYSE: KKR), went public last year amid the surge in demand for video games from people staying at home due to the COVID-19 lockdowns.
Picture Credit: Bloomberg
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