Silver Lake, Saudi's PIF approach Unity in potential $25B gaming buyout
What's the deal? Private equity firm Silver Lake and Saudi Arabia's Public Investment Fund (PIF) have made a takeover approach for Unity Technologies, the maker of software used to build video games, according to people familiar with the matter. Terms remain undisclosed, and the talks are preliminary.
Why now? Unity has been working with investment banks to weigh its options, the people said. The consortium reportedly discussed a valuation near $25 billion before Unity's latest earnings lifted its market value to about $21.5 billion.
The inside track: Silver Lake already owns about 8% of Unity, and its chief executive officer, Egon Durban, sits on the company's board. That long-standing stake gives the consortium a head start in any deal.
Why it matters: Unity makes a core development platform used across the games industry, so controlling it would shift the investor group from owning game publishers to owning the tools that build them. The same consortium already has exposure to mobile developer Scopely and Pokémon Go maker Niantic.
What could go wrong? The talks remain preliminary, with no deal assured. Unity's recent earnings-driven valuation jump could also complicate price negotiations.
The signal: The approach comes amid a renewed wave of large gaming transactions, most notably Silver Lake and PIF's roughly $55 billion take-private of Electronic ArtsDealroom has a profile for this one. Try Dealroom → in August — the largest all-cash sponsor buyout on record. A Unity deal would rank among the biggest software buyouts in years and deepen Saudi Arabia's strategic push into global gaming.
Read more: The Information
Image credit: Games for Change
