Unity Software to buy IronSource: ‘the upside is incredibly clear’

IronSource Ltd (NYSE: IS) closed nearly 50% up on Wednesday after Unity Software Inc (NYSE: U) said it will buy the business platform for $4.40 billion.

Unity Software CEO comments on the merger

The all-stock deal will replace each common share of IronSource with 0.1089 share of Unity Software. Upon completion of the transaction, IronSource shareholders will own roughly 26.5% of the combined company.

Shares of Unity Software slid more than 15% on Wednesday. Reacting to the price action on CNBC’s “Power Lunch”, CEO John Riccitiello said:

Unity Software lowered its full-year guidance

The sell-off in “U”, however, might have been related to the lowered guidance for fiscal 2022 as well. Citing “macro headwinds”, Unity Software said it now forecasts up to $1.35 billion in revenue this year versus $1.35 billion to $1.42 billion it had guided for earlier.

Also on Wednesday, the video game software development company authorised up to $2.50 billion in share repurchase to begin upon completion of the transaction, which, as per the chief executive, will start helping in the near term.