Unity is reportedly engaged in acquisition discussions with Silver Lake and the Public Investment Fund, both of which played a role in Electronic Arts' $55 billion acquisition

Image credit: Unity

Unity is reportedly involved in acquisition discussions with Silver Lake, a private equity firm, and the Public Investment Fund (PIF) of Saudi Arabia. These entities previously made headlines by acquiring Electronic Arts for $55 billion in the early part of this year.

As noted by Reuters, Unity's valuation stands at $25 billion. Discussions on this valuation took place before Unity revealed its most recent quarterly financial results, where it showed a 32% increase in revenue, reaching $622 million, and marked its first quarter of profitability on a GAAP basis.

Following these announcements, Unity's market value climbed to about $21.5 billion, with its stock up by 4% after hours, according to Reuters.

Sources informed Reuters that Unity is collaborating with an investment bank to consider its options after being approached. However, there is no certainty of a deal, and the specifics could still change.

Unity did not comment on these developments, whereas Silver Lake and PIF did not respond immediately to requests for comment from Reuters.

Silver Lake presently has an 8% ownership in Unity, which began with a $400 million investment in May 2017, valuing Unity at $2.6 billion back then.

John Riccitiello, the former CEO, remarked in 2017 that the investment by Silver Lake was largely a precautionary measure as Unity hoped to expand in the virtual and augmented reality sectors.

In 2019, Silver Lake, along with three other investment firms, engaged in acquiring up to $525 million worth of shares from Unity's common shareholders, placing the company’s valuation at $6 billion at that time.

The following year, Unity went public through an Initial Public Offering (IPO), which resulted in a company valuation of $13.7 billion. The IPO also raised $1.3 billion from share sales, despite the company not having achieved profitability in its 18-year history. However, in 2023, Unity announced its first profitable quarter on a non-GAAP basis.

During the summer, Unity experienced its best financial performance since going public, with a 24% rise in revenue, amounting to $546 million for the second quarter.