AppLovin's deal for Unity complicated by IronSource
- Kerry Flynn, author of Axios Pro: Media Deals

Illustration: Aïda Amer/Axios
The read so far on AppLovin's unsolicited bid to buy Unity is that it's gonna be a hard road ahead, given Unity's current agreement to merge with ironSource.
Why it matters: These three businesses are the behind-the-scenes technology underpinning the massive global gaming industry. The outcome will dramatically impact each of their futures, and the industry itself.
What the CEO is saying: Unity CEO John Riccitiello noted AppLovin's proposal at the top of Tuesday's earnings call but declined to discuss it. Unity said in a statement that it would review the offer.
Details: AppLovin's proposal puts Riccitiello as CEO of the combined business, while AppLovin CEO Adam Foroughi would become COO. Unity will own 55% of the company. AppLovin, the rest.
- The offer of $58.85 per share is an 18% premium of Monday's closing price ($49.76) and 48% premium on the closing price of the day before it announced the ironSource deal ($39.76).
Yes, but: Potential concerns for Unity shareholders include receiving only 49% of the voting rights and the $150 million termination fee with ironSource.
What they're saying: The Street, so far, is bearish on AppLovin's gatecrash.
- Bloomberg Intelligence analyst Mandeep Singh said, "Given its proposed deal for IronSource, we believe it's unlikely for Unity Software to accept a seemingly hostile bid from AppLovin."
- "We think interference with the ironSource acquisition is problematic, and will cause Unity's board to tread very carefully before agreeing to a sale outright," Wedbush analysts wrote Tuesday. "We do not expect the deal to happen under the proposed terms."
What's next: AppLovin reports its earnings Wednesday after market close and will likely discuss the deal then.