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AppLovin Seeks to Combine with Unity in Non-Binding Proposal

UTC by Bhushan Akolkar · 2 min read
AppLovin Seeks to Combine with Unity in Non-Binding Proposal
Photo: Shutterstock

AppLovin said that the combined business will generate solid revenue growth and cash flow along with greater operational efficiencies.

On Tuesday, August 9, Paolo Alto-based leading marketing software platform AppLovin submitted a non-binding proposal to combine with public-listed Unity Software (NYSE: U). Unity has been a leading platform in creating interactive real-time 3D content.

AppLovin is looking to integrate with Unity in a way wherein each outstanding share of Unity common stock would be exchanged for 1.152 shares of AppLovin Class A voting common stock and 0.314 shares of AppLovin Class C non-voting common stock.

Thus, if the transaction proceeds, Unity shareholders will receive 55% of the outstanding shares of the combined company. The combined business would also provide a fully integrated growth platform for app developers. Speaking on the matter, Adam Foroughi, AppLovin CEO said:

“We believe that together, AppLovin and Unity create a market leading business that has tremendous growth potential that would generate an estimated run-rate Adjusted EBITDA of over $3 billion by the end of 2024 and would be in the best interest of shareholders of both companies.

Unity is one of the world’s leading platforms for helping creators turn their inspirations into real-time 3D content. With the scale that comes from unifying our leading solutions and innovation that would be achieved with the combination of our teams, we expect that game developers would be the biggest beneficiaries as they continue to lead the mobile gaming sector to its next chapter of growth.”

AppLovin and Unity: A Strong Revenue Boost

AppLovin said that the combined business will generate solid revenue growth and cash flow. Besides, it would also enhance operational efficiencies beyond each company’s standalone performance.

AppLovin expects the combined business to generate over $700 million of Adjusted EBITDA from synergies in 2025E. Considering its solid track record, AppLovin believes that it is well-suited over any other firm to develop an end-to-end platform with Unity.

AppLovin’s powerful AXON machine learning engine along with Unity’s audience reach through games built on Create Solutions will create solid efficiency games for the combined platform. “With AppLovin and Unity working in concert, developers would be able to seamlessly take their app from concept to commercialization with continued growth and optimization at far greater scale and effectiveness, which can drive higher growth for the entire mobile app industry and beyond,” reads the official press release.

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