Unity to merge with ironSource in deal valuing app monetization platform at $4.4 billion

Unity has announced a merger agreement with app monetization platform ironSource, which is now valued at $4.4 billion. The companies plan to build a unique platform for creating, publishing, and monetizing games.

The merger was announced on July 13. It is an all-stock deal, which means that each ordinary share of ironSource will be exchanged for Unity common stock at the 0.1089 rate.

As a result, the companies expect to “deliver a run rate of $1 billion in Adjusted EBITDA by the end of 2024, and $300 million in annual EBITDA synergies by year three.”

On top of that, Silver Lake and Sequoia, the two largest Unity shareholders, will invest $1 billion in Unity in the form of convertible notes. Unity will also launch a $2.5 billion buyback program effective upon closing of the deal.

The merger, which will be subject to regulatory and shareholder approval, is expected to close during Unity’s fourth quarter of 2022. After that, ironSource CEO Tomer Bar-Zeev, as well as two other executives, will join Unity’s board of directors.

Unity and ironSource stockholders will own around 73.5% and 26.5% of the combined company, respectively.

“This is a step further toward realizing our vision of a fully integrated platform that helps creators in every step of their [real-time, 3D] journey,” Unity CEO John Riccitiello said in a statement.

This platform will allow developers of games and RT3D apps to get access to an interactive product with a set of interconnected solutions. It will include the Unity engine, Unity Ads, and the rest of Unity Gaming Services, as well as ironSource marketing, distribution, and monetization tools.