The consortium behind EA’s $55bn buyout is reportedly circling the engine maker, just as its ad business returns it to profit

Unity could become the next major games company to go private. Silver Lake Partners and Saudi Arabia’s Public Investment Fund (PIF) have held talks about acquiring the engine and ad-tech provider, according to Reuters.

The investors reportedly discussed a valuation of around $25 billion before Unity’s latest earnings, which pushed its market capitalisation to about $21.5 billion. Unity’s shares rose roughly 4% in after-hours trading following the report. Unity is said to be working with an investment bank to weigh its options. No deal is guaranteed, and terms could still change.

A familiar pairing

This would be another large games bet for the two investors. Silver Lake and PIF, alongside Affinity Partners, were part of the group that took Electronic Arts private in a $55 billion deal that closed in August, one of the biggest leveraged buyouts on record.

The connections run deeper. Scopely (Monopoly Go!) and Niantic (Pokémon Go), both owned by a group including PIF, Silver Lake and Affinity, already build on Unity’s tools. Silver Lake has backed Unity since 2017, when it invested up to $400 million, and holds around 8% of the company today. Silver Lake’s Egon Durban sits on Unity’s board, so he would usually step back from any board discussions about a sale.

If the deal goes ahead, it would rank among the largest software leveraged buyouts in recent years.

Strong timing

The reported talks follow a strong quarter. Unity’s Q3 revenue grew 32% to $622.1 million, with adjusted earnings of 44 cents per share, ahead of analyst expectations.

The standout was advertising. Growth in Vector, Unity’s AI-powered ad platform, helped the company post its first GAAP quarterly profit since listing in September 2020. That matters for mobile developers and UA teams: Unity’s ad network is a core part of many studios’ monetisation and acquisition stacks. Any change in ownership will be watched closely for its effect on product direction and pricing.

Beyond games

Unity was founded in Denmark in 2004 and is now headquartered in San Francisco. It powers thousands of mobile, console and PC titles. Since going public, it has expanded beyond its engine into ad tech and wider real-time 3D, with its technology now used in automotive design, film, architecture and industrial simulation.

For an industry still in a consolidation cycle, a Unity take-private would put one of game development’s most widely used toolsets in the hands of investors who already own several of its biggest customers.

Source: Reuters