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AppLovin bids $17.5B to acquire Unity
- cowpig 4y agoAccording to Wikipedia, AppLovin has 6.16Bn in total assets and 2.5Bn revenue. How can a company this size bid 17.54Bn to acquire Unity?
- encryptluks2 4y agoI just commented about this. I get the impression large investors are using other lesser known companies to make acquisitions probably to conceal financial records somehow. It's like a shell corp but one that is legitimate enough to not be called a shell corp outright.
- nl 4y ago> I get the impression large investors are using other lesser known companies to make acquisitions probably to conceal financial records somehow. It's like a shell corp but one that is legitimate enough to not be called a shell corp outright. That's simply not correct. It's an all stock transaction, so AppLovin can issue stock equal to $17.5B and transfer that to owners of Unity stock in return for their Unity stock. Then the two companies merge and the AppLovin stock owners now own both. You can read details here: > in a transaction 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. Under these terms, current Unity shareholders would receive approximately 55.0% of the outstanding shares of the combined company, with the Class A shares representing approximately 49.0% of the outstanding voting rights of the combined company. https://www.businesswire.com/news/home/20220809005530/en/AppLovin-Submits-a-Compelling-Non-Binding-Proposal-to-Combine-with-Unity https://www.businesswire.com/news/home/20220809005530/en/App...
- cgb223 4y agoDo AppLovin stock holders prior to the acquisition see a massive price decrease in their shares? Seems like they’re basically printing double the existing stock to cover it
- kentonv 4y agoNo, because the acquisition makes AppLovin more valuable. If merging with Unity makes AppLovin $17.5B more valuable than it was previously, then the existing stock's value doesn't change. Of course, the market may disagree on the value in either direction. Mergers are weird.
- nl 4y agoThere's an added complication that some of the stock is class-C non-voting stock (which is less valuable) but they plan to make it voting stock at some stage after the transaction. Also, Unity stock holders end up holding 55% of the merged company. And Unity is a loss making company, with only $297.0 Q2 revenue. https://www.marketscreener.com/quote/stock/UNITY-SOFTWARE-INC-112492634/news/Unity-Software-Announces-Second-Quarter-2022-Financial-Results-Form-8-K-41257516/ https://www.marketscreener.com/quote/stock/UNITY-SOFTWARE-IN...
- veidr 4y ago$292.0 million, but yeah.
- throwawaytemp27 4y agoIt would only go in half if they issued double the shares and didn’t get any assets. In this case, the expectation is that the value of Unity equals roughly the value of the issued shares.
- deleted 4y ago[deleted]
- pigtailgirl 4y ago-- In the same manner that Twilio acquired Sendgrid -- https://techcrunch.com/2018/10/15/twilio-acquires-email-api-platform-sendgrid-for-2-billion-in-stock/ https://techcrunch.com/2018/10/15/twilio-acquires-email-api-...
- maxerickson 4y agoThe valuation (based on the trading price of each stock) of the combined companies is more than the $18 billion (it can vary in exciting ways). This article lays it out pretty clearly: https://www.barrons.com/articles/applovin-unity-software-takeover-bid-news-51660049615 https://www.barrons.com/articles/applovin-unity-software-tak...
- paxys 4y agoThe title is too simplified. The merger/acquisition will create a new entity in which Unity will own 55% of the total shares and 49% of voting shares. Unity CEO John Riccitiello will become CEO of the combined business, while AppLovin CEO Adam Foroughi will take the COO role. This is basically a desperate play by AppLovin to prevent Unity from acquiring ironSource (its main competitor) and cutting it out of the mobile ads business.
- bane 4y agoIt's so interesting that the move to avoid being destroyed is to destroy oneself.
- atomicnumber3 4y agoIf you can't beat 'em, reverse-pseudo-corporate-join 'em?
- Thorrez 4y agoReminds me of how FireEye bought Mandiant, then 8 years later Mandiant sold FireEye.
- stavros 4y agoHow is it possible for the subsidiary to sell the parent?
- maccard 4y agoIn a lot of these acquisitions, it's not a becomes a subsidiary of b, it's often that all of the employees of A are transferred to B under something like a TUPE [0]. As part of these acquisitions, the leadership of the acquired team can be offered senior positions in the acquirer, e.g. in this case the CEO of AppLovin would become the COO of the new world. Combine these two things and with a bit of luck and timing, AB corp now decided that A isn't in its best interests anymore and decides to sell that part of its business. [0] https://www.acas.org.uk/employee-rights-during-a-tupe-transfer#:~:text=TUPE%20stands%20for%20Transfer%20of,the%20contract%20for%20office%20cleaning https://www.acas.org.uk/employee-rights-during-a-tupe-transf...
- encryptluks2 4y agoWhy do I get a sense that some of these companies making acquisitions are just fronts for acquisitions. Regardless, personally I see a lot more value in Unity than Twitter.
- deleted 4y ago[deleted]
- bpodgursky 4y agoFor those discussing the dollar amounts, it's really just a merger with AppLovin as the dominant partner [1]. It's an all-stock deal, so I don't think there's any need for external money. [1] https://www.marketwatch.com/story/applovin-submits-bid-to-buy-unity-software-in-a-deal-valued-at-20-billion-2022-08-09 https://www.marketwatch.com/story/applovin-submits-bid-to-bu...
- ztrww 4y agobased on the details of their offering Unity would actually end up the dominant partner. Even if just barely
- uomo 4y agoEarlier discussion: https://news.ycombinator.com/item?id=32397510 https://news.ycombinator.com/item?id=32397510
- _jezell_ 4y agoMeta should have bought Unity. Zuck is sleeping at the wheel. They are gonna try to win at the metaverse without a dev platform. Good luck with that.
- deleted 4y ago[deleted]
- cma 4y agoThere would have to be some serious anti-trust concerns given their mobile marketshare.
- MikeTheRocker 4y agoThey apparently tried in 2015 [1]. [1] https://techcrunch.com/2019/02/13/facebook-mulled-multi-billion-dollar-acquisition-of-unity-book-claims/ https://techcrunch.com/2019/02/13/facebook-mulled-multi-bill...
- johnnyanmac 4y agointeresting, that would have been very shortly after John became CEO. Wonder how that would have turned out if John was given another year or 2 to sink his fingers into Unity?
- ehnto 4y agoIt is surprising they didn't, and while I am glad they didn't for Unity's sake, it feels like Unity is about to get shagged anyway. There are sharks circling their value propositions to developers, and they're spending their energy on acquisitions that demonstrate their focus is shifting away from those same developers. Who wants to commit a multi-year, company wide project to an engine with lagging technical offerings AND a faltering mission statement?
- grumple 4y agoThey are forgetting that developers don't like ad companies or being controlled. Devs will move on, leaving unity behind.
- soared 4y agoAppLovin will be caught in up in an ad fraud scandal within two years. I can't share the data but we've stopped spending any money through them due to obvious fraud. Previously we were spending ~20k/day with them. To be fair, unity isn't clean either. For over a month in Q1 of this year they had a whole lot of ads where the "x" button to close was actually covered by the ad, so ~50% of ads were being clicked when a user wanted to close them.
- foolfoolz 4y agoapplovin feels like the modern day embedded IE toolbar in your MSI
- wsc981 4y agoIs it legally fraud of a ad SDK uses these kinda of tricks? I encounter these kinds of tricks in many of the games my daughter plays on the iPad and hate it immensely, but it seems everybody gets away with it ... Are there any laws that should prevent these kinds of dark patterns?
- jerrre 4y agoI would imagine that if something is deemed fraud, it's the ad-space buyer that is deemed the victim, as they're paying for clicks that aren't genuine interest, and not the user/viewer. IANAL etc, but I thought it would be good to add the distinction.
- otabdeveloper4 4y agoIt's not a dark pattern, because it doesn't really benefit anyone. Just destroys the signal by drowning it in noise so advertising becomes just a little bit dumber.
- rhodorhoades 4y agoIt benefits the app creator, and whoever is behind the ad serving to the detriment of the person doing the advertising. They get charged each time someone clicks that add.
- password4321 4y agoEither way, Unity += ads. dupe 2022-08-09 https://news.ycombinator.com/item?id=32397510 https://news.ycombinator.com/item?id=32397510 (AppLovin offers to buy Unity Software in $17.5 bln deal) > For people wondering what happens with the ironSource deal, this bid is meant to derail it. see also 2022-07-14 https://news.ycombinator.com/item?id=32097752 https://news.ycombinator.com/item?id=32097752 (Gamedevs not baking in monetization are “fucking idiots”, says Unity CEO) 2022-07-14 https://news.ycombinator.com/item?id=32096371 https://news.ycombinator.com/item?id=32096371 (Unity is acquiring a company who made a malware installer) 2022-07-13 https://news.ycombinator.com/item?id=32081051 https://news.ycombinator.com/item?id=32081051 (Unity merges with IronSource)
- matheusmoreira 4y agoIs it time to start avoiding all games created with Unity?
- henriquecm8 4y agoNot yet, games can still be created in older versions. I think many game devs will be moving from unity on new projects. But there are many projects that have been in development for years, and you shouldn't avoid them because the engine's company is fucked up.
- andrewstuart 4y agoIt's a weird decision. Unreal Engine is redefining game engines into something capable of creating both movies and games, and pushing the state of the art to somewhere amazing. Whilst..... Unity is laying off people and leaning into low quality advertising. It's weird also that the big players like Microsoft didn't swing in to buy Unity and do the same thing that Unreal is doing. It's like the future of high end media is being created in this space and Unity is tossing away their second place position entirely.
- gibolt 4y agoUnity is still the engine for the vast majority of 2D and 3D games, especially VR. It feels like each has filled their niche well, and they are now bifurcating to target different audiences. It doesn't seem to me like Unreal will ever capture the majority of the market, unless their tactics change.
- intelVISA 4y agoI would wager it's owed mostly to the mobile market dwarfing console/PC nowadays for which Unity is the de facto choice. The same way the web market gives us legions of Js devs: Unity is just the game engine ver of Node - easy to hire for and runs everywhere.
- prox 4y agoI am so glad I didn’t go for Unity but Godot. I know it’s playing catch-up but it’s been a joy to work with. Not sure what to think of Unity.
- Schinken_ 4y agoFor anyone interested in creating games. I can only second this. Been using Unity for work and hobby purposes since Unity 5 and feel its always been undecided on how to do things. Even more so now than back then. With Godot I've never had the feeling that I'm working against the engine to achieve something. Godot has one, maybe two different ways of doing something. If more than one, there are usually obvious tradeoffs between the two ways.
- snird 4y agoThis probably have an amazing background story. AppLovin and Unity has a similar market cap, making this merger almost equal in power - which typically leads to an uphill battle in management of who has the power. This first and foremost blocks the IronSource merger, and it's probably something that Unity management don't want to do. But the board must consider it or otherwise it will suffer hell of litigation from shareholders. It's super interesting to see where this all leads.
- definitelyhuman 4y agoAbsolutely, I hope we get to hear the story at some point - so much bad blood between AL and IS. With this proposal coming on the day of Unity's shareholder meeting, and sending weak signals about AppLovin's outlook, it's such a weird play. I'm too much of a rube to know if it's brilliant or desperate, but I'm sure it's a good story regardless
- pclmulqdq 4y agoIt really does seem that this bid will be tying two sinking ships together. Whether that helps them float, I don't know.
- robotburrito 4y agoI sometimes wondered if Meta would purchase them in an attempt to make it the defacto metaverse dev tool.
- sprkwd 4y agoSeems like a no-brainer. But maybe they're building their own.