ironSource: Our Unity merger deal superior to Applovin’s

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

One day after ApplLovin announced that it is seeking to acquire Unity, on condition that it does not complete its merger with ironSource, the Israeli company today published its second quarter financial results and referred to the latest developments.

ironSource said, “Unity received a non-binding, hostile acquisition proposal from Applovin. We firmly believe that our proposed deal with Unity is clearly superior, and will deliver greater value for Unity and ironSource shareholders.”

ironSource has developed a platform for games and app developers that provides them with tools for advertisements, 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 company valuation of $4.4 billion for ironSource, which would have left Unity as the majority shareholder. Yesterday, AppLovin, which in engaged in similar activities to ironSource, reported that it had offered to merge with Unity, which would hold 55% of shares after the merger. In the wake of the announcement ironSource’s share price fell 11.21% to $4.20, giving a market cap of $4.298 billion. ironSource has been listed on the NYSE since it completed 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 US Securities and Exchange Commission (SEC), in which he said that he could not provide more information but he would give them two things to think about. “There is a lot of interest in being part of Unity. It says a lot about what we have built here. Secondly, we are continuing to focus on customers and partners.”

At the same time, ironSource CEO Tomer Bar-Zeev sent a letter to the company’s employees in which he said that AppLovin’s offer to Unity was unilateral. “We see this as evidence of the value of our proposed merger with Unity creating and strengthening a combined company that will be created. We think that 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 profit was $12.7 million, up 27.2% from 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 of Globes Publisher Itonut (1983) Ltd., 2022.