Saudi Arabia already has EA and is now going after Unity, the engine with which thousands of video games are created

In August the purchase of Electronic Arts for $55 billion was closed. The buyer was a consortium formed by the Saudi Public Investment Fund (PIF), Silver Lake and Affinity Partners. For practical purposes, the result is that the PIF now controls the 93.4% of the companywhich went private after about 40 years. The operation was financed with 36,000 million contributed by the PIF and other investors, and with another 20,000 million from JP Morgan Chase.

Since then, the changes at EA have been profound. In October a restructuring came with up to 400 layoffs, 50 of them at BioWare, the Mass Effect and Dragon Age studio, which is closing after more than 30 years of activity. In fact, the next Mass Effect, announced in 2020 and still in an incipient development phase, would have been cancelled.

Well, the same investors already have another objective in the sector. As revealed Reuters From sources familiar with the negotiations, Silver Lake and the PIF have held talks in recent weeks to buy UnitySoftwareone of the largest providers of tools for creating video games.

A valuation of about $25 billion

The consortium even spoke of a valuation of some 25 billion dollars before Unity presented its latest results, which raised its market capitalization to 21.5 billion. After the news was published, its shares rose about 4% outside normal trading hours. Of course, for now nothing is closed. Unity is apparently working with an investment bank to study its options, and the plan and terms may still change.

If realized, it would be one of the largest leveraged buyouts in the software sector in recent years, that is, an acquisition financed largely with debt. And it is not the first relationship between both parties, since Silver Lake invested up to $400 million in Unity in 2017, owns around 8% of the company and is part of its board of directors. In addition, Scopely, responsible for Monopoly Go!, and Niantic, creator of Pokémon Go, already use Unity tools, and both belong to a group in which PIF, Silver Lake and Affinity Partners participate.

The interest comes on the heels of third-quarter results. In that period, Unity’s revenue grew 32% to $622.1 million, and the company recorded its first quarterly profit under GAAP accounting standards since going public in September 2020. Part of that result is supported by Vector, its AI-based advertising platform.