A consortium including private equity firm Silver Lake Partners and Saudi Arabia's sovereign wealth fund PIF has engaged in recent discussions to acquire gaming software provider Unity. Reuters reported that the group approached Unity in recent weeks, exploring a valuation of approximately $25 billion before the company's latest earnings report, which brought its market capitalization to around $21.5 billion.
Unity is reportedly consulting with an investment bank to assess its options following this approach. The talks are described as preliminary, and no deal is guaranteed.
This potential acquisition would mark another significant investment by Silver Lake and PIF into the gaming sector. The two entities, alongside Affinity Partners, recently completed a $55 billion acquisition of Electronic Arts. Since that deal, EA has undergone corporate restructuring, including studio closures and the cancellation of the next Mass Effect game, as reported by BioWare.
Unity's widely used game engine and development tools have been instrumental in the creation of numerous mobile, console, and PC titles, such as Genshin Impact, Hollow Knight, Among Us, Subnautica, and Beat Saber. Notably, its tools are also utilized by Scopely, developer of Monopoly Go!, and Niantic, maker of Pokémon Go, both of which are owned by a group that includes Silver Lake, PIF, and Affinity Partners.
Silver Lake has previously invested $400 million in Unity and holds an 8% stake, making it one of the company's largest shareholders. Since its public debut in 2020, Unity has expanded its business beyond game development software into advertising technology and real-time 3D software for industries like automotive design, filmmaking, architecture, and industrial simulation.
Following the initial reports of acquisition talks, Unity's shares saw an increase of nearly 15% in regular trading.