Gaming software provider Unity in talks for takeover
What's the story
Unity Software, a leading provider of gaming software, is in talks for a potential acquisition by a consortium of investors. according to Reuters. The group includes private equity firm Silver Lake Partners and Saudi Arabia's Public Investment Fund (PIF). The move comes amid ongoing consolidation trends in the video game industry.
Past deals
Silver Lake has prior stake in Unity
The potential acquisition would be another major investment in the gaming sector for both Silver Lake and PIF.
The duo was also part of the consortium that took Electronic Arts, the maker of "EA Sports FC," private in a $55 billion deal last August.
Silver Lake owns about 8% of Unity and has previously invested up to $400 million in the company back in 2017.
Market reaction
Buyer consortium previously discussed $25 billion valuation for Unity
The buyer consortium had previously discussed a valuation of around $25 billion for Unity before its latest earnings report.
The report raised the company's market capitalization to some $21.5 billion, with shares rising about 4% in extended trading after Reuters's report.
In light of these developments, Unity is working with an investment bank to explore its options amid ongoing discussions.
Business growth
Unity's technology already in use by buyer consortium's portfolio companies
Unity's game engine and developer tools are already being used by Scopely, the developer of Monopoly Go!, and Niantic, the creator of Pokemon Go.
Both companies are owned by a group that includes PIF, Silver Lake, and Affinity Partners.
Last Thursday, Unity reported third-quarter results that beat Wall Street estimates with strong growth in its advertising and game-development businesses.
Tech expansion
Unity has expanded beyond gaming into other sectors
Founded in Denmark in 2004, Unity has expanded beyond its core game engine business into advertising technology and broader real-time 3D software.
The company makes the software engine behind thousands of mobile, console, and PC games.
Its technology is also increasingly being used in automotive design, filmmaking, architecture, and industrial simulation.