ironSource: Our merger deal with Unity is superior to that of Applovin

Israeli app monetization developer ironSource (NYSE: IS) has responded to the merger offer for Unity Software filed by US rival AppLovin, which, if realized, would cancel its own merger with Unity.

A day after AppLovin announced that it was seeking to acquire Unity, on the condition that it does not complete its merger with ironSource, the Israeli company today released its second quarter financial results and referenced the latest developments.

ironSource said, “Unity has received a hostile, non-binding acquisition proposal from Applovin. We strongly believe that our proposed deal with Unity is clearly superior and will bring greater value to Unity and ironSource shareholders.

ironSource has developed a platform for game and app developers that provides them with tools for ads, services and analytics. Unity Software has developed a 3D software environment for creating computer games.

Last month, ironSource and Unity announced an all-stock merger at a $4.4 billion valuation for ironSource, which would have left Unity as the controlling shareholder. Yesterday, AppLovin, which has engaged in similar businesses to ironSource, announced that it had offered to merge with Unity, which would own 55% of the shares after the merger. Following the announcement, ironSource’s stock price fell 11.21% to $4.20, giving a market capitalization of $4.298 billion. ironSource has been listed on the NYSE since completing a SPAC merger last summer at a company valuation of $11.1 billion.

Unity CEO John Riccitiello yesterday sent a letter to employees as well as the U.S. Securities and Exchange Commission (SEC) in which he said he could not provide more information but that it would give them two things to think about. “There’s a lot of excitement about being part of Unity. It says a lot about what we’ve built here. Second, we continue to focus on customers and partners.”

Meanwhile, ironSource CEO Tomer Bar-Zeev sent a letter to company employees in which he said AppLovin’s offer to Unity was one-sided. “We see this as evidence of the value of our merger proposal with Unity creating and strengthening a combined company that will be created. We believe we are talking about a defensive and desperate measure by AppLovin.”

In its second quarter financial results, ironSource reported revenue of $183 million, up 35% from the corresponding quarter of 2021. GAAP net income was $12.7 million, up 27, 2% compared to the corresponding quarter and EBITDA was $56 million, up 22%.

Published by Globes, Israel business news – en.globes.co.il – on August 10, 2022.

© Copyright Globes Publisher Itonut (1983) Ltd., 2022.


Valerie J. Wallis