Unity Software Inc. (NYSE:U) received a proposal to acquire AppLovin Corporation (NasdaqGS:APP) for $17.5 billion in a reverse merger transaction on August 9, 2022. AppLovin submitted a compelling non-binding proposal to the Board of Directors of Unity Software Inc. with Unity, in a transaction where each outstanding share of Unity common stock would be exchanged for 1.152 shares of AppLovin Class A voting common stock and 0.314 shares of AppLovin Class C non-voting common stock. Based on this non-binding proposal, existing AppLovin Class B common shares (20:1 votes) would be converted to Class A common shares (1:1 vote) in connection with the closing of the proposed transaction. AppLovin shareholders would hold approximately 45% of the outstanding common shares of the combined company, including Class C, with such shares representing approximately 51% of the outstanding voting rights of the combined company. Unity stockholders would receive approximately 55% of the outstanding shares of the combined company, with Class A common shares representing approximately 49% of the outstanding voting rights of the combined company. In connection with the proposed transaction, AppLovin expects to apply to list its shares of Class C common stock on the Nasdaq Global Select Market in connection with the proposed combination. AppLovin proposes that Unity's Chief Executive Officer John Riccitiello become Chief Executive Officer of the combined business and Adam Foroughi become the Chief Operating Officer. The Board of Directors of the combined company would be reconstituted so that Unity would appoint the majority of members, consistent with Unity shareholders' economic stake. The rest of the management team and Board of Directors would be a combination from each company to be mutually determined.

This proposal has the unanimous support of the AppLovin Board of Directors. Pending acceptance by the Unity Board of Directors, AppLovin is highly confident that its proposed transaction would be completed on a timely basis. The execution of a definitive merger agreement between AppLovin and Unity would be subject to approval by each company's Board of Directors, the termination of the proposed acquisition of ironSource LTD, and other customary signing conditions. The completion of the transaction would be subject to customary closing conditions, including receipt of required regulatory approvals and approval of AppLovin and Unity shareholders.

J.P. Morgan is serving as AppLovin's financial advisor and Wilson Sonsini Goodrich & Rosati is serving as AppLovin's legal advisor.Goldman Sachs & Co. LLC and Morgan Stanley are serving as financial advisors, and Morrison & Foerster, Richard Layton & Finger and Herzog, Fox & Neeman are serving as legal advisors to the Unity Software Inc.