ironSource drops as AppLovin’s Unity bid contingent on ironSource deal exit
Shares of ironSource (IS) are down 12%, to $4.16 in Tuesday morning trading after AppLovin (APP) announced it has submitted a non-binding proposal to the board of directors of Unity Software (U) to combine AppLovin with Unity in a stock-based transaction.
Under the terms offered, current Unity shareholders would receive approximately 55% of the outstanding shares of the combined company, with the Class A shares representing approximately 49% of the outstanding voting rights of the combined company.
AppLovin, which markets software platforms for app developers to help them find customers and bring in revenue, is offering gaming platform Unity an alternative to its recently announced a deal to buy IronSource.
The all-stock merger consideration payable in a mix of AppLovin Class A and Class C common stock would value Unity at $58.85 per share and $20B enterprise value, representing a 48% premium to the Unity share price as of July 12 and 18% to yesterday’s closing price based on the closing price of AppLovin’s Class A common stock on August 8, AppLovin stated.
The execution of a definitive merger agreement between AppLovin and Unity would be subject to approval by each company’s board of directors, the termination of the proposed acquisition of ironSource LTD, and other customary signing conditions, the company noted.
Previously, on July 13, Unity and ironSource had announced that they 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.
Under the terms of that deal, current Unity stockholders will own approximately 73.5% and current ironSource shareholders will own approximately 26.5% of the combined company.
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