Gaming tech company Unity and ironSource said Wednesday that they plan to merge in an all-stock deal that would make ironSource a subsidiary of Unity.
The deal values IronSource at $4.4 billion, according to an announcement from the companies. The merger comes barely a year after 11-year-old ironSource went public, raising $2.3 billion through its IPO.
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Unity is also a relatively new public company, raising $1.3 billion through its IPO in 2020. But the company, founded in 2004, has faced its own challenges this year. Unity laid off about 4% of its employees last month, following turmoil in the public markets.
“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,” Unity CEO John Riccitiello said in a statement. “This is a step further toward realizing our vision of a fully integrated platform.”
The merger announcement shows some companies are taking advantage of the market downturn and lower stock prices to consolidate. Tech companies in particular have taken a beating in the public markets and seen their valuations plummet as rising inflation and interest rates have spooked investors.
San Francisco-based Unity makes video game software development technology, while Tel Aviv-based ironSource’s technology provides a business platform for app developers.
Once the deal closes, current Unity stockholders will own 73.5% of the combined company, and current IronSource stockholders will own 26.5%, according to the company. IronSource CEO Tomer Bar-Zeev will join Unity’s board of directors.
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