EA’s New Owners in Talks to Acquire Unity

Investment firm Silver Lake and Saudi Arabia’s sovereign wealth fund PIF, which bought Electronic Arts this year, are in talks to acquire Unity, the developer of one of the world’s most popular game engines. Reuters reported the news, citing two people familiar with the matter.

Silver Lake and PIF approached Unity a few weeks ago. During the talks, the parties discussed valuing the company at around $25 billion, while Unity’s market capitalization stood at about $21.5 billion. The talks are still at an early stage, so the deal may not happen at all, and its terms could still change.

According to the sources, Unity has already hired an investment bank to evaluate its options. The company declined to comment on the report, and Silver Lake and PIF did not respond to requests for comment. Silver Lake has long had ties to Unity. The firm invested in the engine developer back in 2017 and now owns about 8% of its shares. On top of that, Silver Lake’s Egon Durban sits on Unity’s board of directors.

The news of the talks broke on the same day Unity released its third-quarter earnings report. The company’s revenue grew 32% to $622.1 million, and Unity posted a quarterly profit for the first time since going public in 2020. After the report, the company’s shares rose nearly 15%, and after the news of the talks, they climbed a few more percent in after-hours trading.

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If the deal goes through, it will be one of the biggest in the history of the gaming industry. In August, Silver Lake, PIF, and Affinity Partners completed their buyout of Electronic Arts for about $55 billion. It was one of the largest leveraged buyouts in history.

Unity is the second most popular game engine in the world after Unreal Engine. Thousands of games have been built on it, including Hollow Knight, Genshin Impact, Cities: Skylines, and Pokémon GO. That said, the last few years have been tough for the company. In 2023, it found itself at the center of a scandal over an attempt to introduce a Runtime Fee charged for every game install. After a wave of criticism from developers, Unity dropped the plan.