Silver Lake and Saudi PIF hold talks to take Unity private near $25B

Unity Software has held recent talks to be acquired by a consortium that includes private equity firm Silver Lake Partners and Saudi Arabia's sovereign wealth fund PIF, according to people familiar with the matter. The buyers floated a valuation of about $25 billion before Unity's latest earnings report, which lifted the company's market capitalization to roughly $21.5 billion. Shares rose about 4% in extended trading once the news landed.

Unity has brought in an investment bank to evaluate its options after the approach, the sources said. Nothing is signed, and the plan and terms could still change. Unity declined to comment, while Silver Lake and PIF did not immediately respond to requests for comment.

Silver Lake already owns about 8% of Unity and has been in its orbit since investing up to $400 million back in 2017, keeping it among the company's largest shareholders. Its Egon Durban also sits on Unity's board, a dual role that would typically push him to recuse himself from boardroom deliberations over a sale.

The play would be well-trodden ground for both buyers. Silver Lake, PIF and Affinity Partners were part of the consortium that took Electronic Arts private in a $55 billion deal that closed in August. That same group also owns Scopely, the studio behind 'Monopoly Go!', and Niantic, the creator of 'Pokemon Go' — both built on Unity's engine.

Taking Unity private would rank among the biggest leveraged buyouts in software in recent years. The San Francisco-based company, founded in Denmark in 2004, makes the engine behind thousands of mobile, console and PC games, and its technology is increasingly used in automotive design, filmmaking, architecture and industrial simulation. Its third quarter beat Wall Street estimates, with revenue up 32% to $622.1 million and adjusted earnings of 44 cents a share, helped by growth in its AI-powered Vector advertising platform — delivering Unity's first profit on a GAAP basis since its September 2020 IPO.