Unity reportedly in acquisition talks with Silver Lake and Saudi Arabia's PIF

Unity has reportedly engaged in acquisition talks with private equity firm Silver Lake and Saudi Arabia's Public Investment Fund. GamesIndustry.biz, citing Reuters, notes that both firms acquired Electronic Arts for $55 billion earlier this year.

According to Reuters, Unity is valued at $25 billion. Sources said a consortium of investors discussed that figure before Unity's latest financial report. In that report, the company posted its first GAAP-profitable quarter, with revenue up 32% to $622 million. Reuters said the results lifted Unity's market capitalisation to about $21.5 billion, and shares rose 4% in extended trading.

Sources told Reuters that Unity has been working with an investment bank to evaluate its options following the approach. They also said no deal is certain and that the plan and terms may still change. Unity declined to comment. Silver Lake and PIF did not immediately respond to Reuters' request.

Silver Lake is already a Unity shareholder, with an 8% stake. It invested $400 million in May 2017, when Unity was valued at $2.6 billion. Then-CEO John Riccitiello said at the time the investment was primarily for safety, as Unity aimed to pursue VR and AR markets.

Silver Lake was also one of four investment firms in a 2019 tender offer to buy up to $525 million of Unity shares from common shareholders, at a $6 billion valuation. Unity went public a year later at a $13.7 billion valuation, with share sales totalling $1.3 billion.

On profitability, Unity reported its first non-GAAP profitable quarter in 2023. In the summer, it reported its strongest quarter as a public company, with second-quarter revenue up 24% to $546 million.