The investors discussed a valuation of about $25 billion, unnamed sources said. No deal is certain, and Unity is working with an investment bank to evaluate its options.
Private equity firm Silver Lake and Saudi Arabia’s sovereign wealth fund, Public Investment Fund (PIF), approached Unity in recent weeks about buying the company through an investor consortium. Reuters disclosed the talks on 5 November, citing unnamed people familiar with the confidential discussions.
Unity makes software tools used to create video games and interactive 3D applications. A completed acquisition would take the publicly traded company private and place its ownership with the buying investors.
The sources said the consortium discussed an acquisition valuation of about $25 billion before Unity’s latest earnings report. By comparison, Reuters said the earnings report lifted Unity’s stock-market capitalization, the total market value of its shares, to roughly $21.5 billion.
Unity’s third-quarter results, released on 5 November, beat Wall Street estimates, supported by growth in its advertising and game-development businesses. Its shares rose about 4% in extended trading after the acquisition report.
Silver Lake already owns about 8% of Unity. It invested up to $400 million in the company in 2017 and remains among its largest shareholders. Silver Lake’s Egon Durban also sits on Unity’s board. Reuters said that dual role would typically lead him to step aside from board deliberations on a sale.
The investors have bought a major gaming company together before. Reuters said Silver Lake and PIF were part of the consortium that took Electronic Arts private in a $55 billion deal that closed in August.
Average cash earnings rose 4.6% to 311,409 yen (about $2,000), while the labor ministry said a 32.6% jump in special payments reflected a statistical quirk rather than higher bonuses.
Unity declined to comment to Reuters. Silver Lake and PIF did not immediately respond to requests for comment. The unnamed sources said Unity was working with an investment bank to evaluate its options following the approach. Whether a deal proceeds remains unresolved, and the plan and terms could still change.
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