MortimerDodd
2022-08-30

$Unity Software Inc.(U)$

It seems that there’s a soap opera going on betweenUnity Software(NYSE:U),AppLovin(NASDAQ:APP) and ironSource(NYSE:IS). Last week, AppLovinbid to buy outUnity Software. Then, this morning, it was revealed that Unityrejected AppLovin’s buyout bid. Also, ironSourcereaffirmed its commitmentto merge with Unity, a transaction that hasn’t actually happened but could be more likely now.

Obviously, there’s a lot to unpack here. First of all, the business models of AppLovin and ironSource are somewhat similar. After all, they both focus on helping developers market and commercialize their apps. Unity’s business model is different, as the company is primarily a 3D-content platform.

It might seem that both AppLovin and ironSource could be a good fit for a business combination with Unity Software. However, Unity’s board of directors doesn’t seem to see the synergy with AppLovin. Just recently, Unity Software rejected AppLovin’s all-stock takeover proposal. This would have had an enterprise value of $20 billion.

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