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Exclusive-Silver Lake, PIF have held recent talks to buy gaming software provider Unity, sources say

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In short

Silver Lake and Saudi Arabia’s Public Investment Fund initiated discussions prior to Unity Software's latest financial results, leveraging an existing relationship that includes an 8 percent ownership stake and a board seat held by Silver Lake. Unity is reviewing its strategic alternatives with an investment bank while talks remain confidential with no certainty of an agreement. The takeover interest coincides with Unity posting a 32 percent revenue increase to $622.1 million, driven by its core development tools and AI Vector ad platform.

Key points

  • The proposed transaction would result in one of the largest software sector leveraged buy…: The proposed transaction would result in one of the largest software sector leveraged buyouts seen in recent years.
  • Silver Lake and the PIF are building on a prior partnership that took video game publishe…: Silver Lake and the PIF are building on a prior partnership that took video game publisher Electronic Arts private for $55 billion.
  • Unity is formally evaluating its strategic options with an investment bank, though an off…: Unity is formally evaluating its strategic options with an investment bank, though an official transaction is not guaranteed.

Sources checked by our analysis pipeline: 1

NEW YORK, Nov 5 : Gaming software provider Unity Software has held recent talks to be acquired by a consortium of investors including private equity firm Silver Lake Partners and Saudi Arabia’s sovereign wealth fund PIF, according to people familiar with the matter, as consolidation in the video game industry continues.

The deal would mark another big gaming bet for Silver Lake and Public Investment Fund, which were part of the consortium that took Electronic Arts, maker of “EA Sports FC,” private in a $55 billion deal that closed in August.

Silver Lake, which owns about 8 per cent of Unity, and PIF approached the company in recent weeks, the people said, asking not to be identified because the discussions are confidential.

The buyer consortium discussed a valuation of about $25 billion before Unity's latest earnings report, which lifted its market capitalization to roughly $21.5 billion. Its shares were up about 4 per cent in extended trading after the Reuters report.

Unity has been working with an investment bank to evaluate its options following the approach, the people said. No…

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