Unity has reportedly engaged in acquisition talks with private equity firm Silver Lake and Saudi Arabia’s Public Investment Fund (PIF), both of which acquired Electronic Arts for $55 billion earlier this year.
According to Reuters, Unity is valued at $25 billion. Sources indicated that a consortium of investors discussed this valuation prior to Unity’s latest financial report, where the company posted its first GAAP-profitable quarter and a 32% revenue increase to $622.1 million.
Reuters reported that this increased Unity’s market capitalisation to approximately $21.5 billion, with shares rising 4% in extended trading.
“Unity has been working with an investment bank to evaluate its options following the approach,” sources told Reuters. “No deal is certain, and the plan and terms may still change.”
Unity declined to comment, while Silver Lake and PIF “did not immediately respond” to Reuters request.
Silver Lake owns an 8% stake in Unity, having invested $400 million in May 2017 when the company was valued at $2.6 billion.
At the time, former CEO John Riccitiello stated that Silver Lake’s investment was primarily “for safety” as Unity aimed to capitalise on VR and AR markets.
In 2019, Silver Lake was one of four investment firms to participate in a tender offer to purchase up to $525 million of Unity shares from common shareholders. At that time, the company was valued at $6 billion.
A year later, Unity completed its Initial Public Offering, reaching a valuation of $13.7 billion. Share sales totaled $1.3 billion, although the company had not yet achieved profitability in its 18-year history. Unity reported its first profitable quarter on a non-GAAP basis in 2023.
The company reported its strongest quarter as a public company in the summer, with revenue increasing 24% to $546 million in the second quarter.