By Sam Boughedda
AppLovin (NASDAQ:APP) has made an offer to acquire Unity Software Inc. (NYSE:U) in an all-stock transaction, it was revealed Tuesday.
AppLovin said it has made an offer where 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.
AppLovin is looking to capitalize on the growing demand for three-dimensional gaming, with both companies creating software to design video games.
More than 50% of the world's video games are made with Unity, including "Call of Duty: Mobile" and "Pokemon Go." Meanwhile, AppLovin helps developers to scale and monetize their apps.
"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," said Adam Foroughi, AppLovin CEO. "Over the last decade we have built and operated a leading and innovative company in mobile app marketing and monetization solutions. Unity is one of the world's leading platforms for helping creators turn their inspirations into real-time 3D content."
AppLovin stated the deal will provide value to shareholders of both companies, including scale, value creation, and the capacity to make strategic investments.
Unity shares jumped more than 6% at the open on the news, while AppLovin is down over 12%.