In June 2021, which was Israel’s peak when it came to IPOs IPOs, IronSource went public on the New York Stock Exchange at a value of $ 11.1 billion Since then, like many stocks in the tech world, both abroad and in Israel, the company's stock crashed, with a decrease in nearly 80 percent of its value. Now, trading at about one-fifth of its original value, the Israeli company is finding a new home: working with Unity to develop their gaming engine. According to the announcement made by the companies, the merger was valued at $4.4 billion for the Israeli company which reflects a 74 percent premium on the share price today. However, as mentioned, this is still only about a third of the value when it went public.
How mergers emerge
The Israeli IronSource was founded in 2010 by brothers Roi, Eyal and Itai Millard and Tomer Bar Zeev, who now runs the company. The IronSource platform allows game and app developers to generate revenue by showing ads and growing their user base by running marketing campaigns. The platform also offers layer of tools to make growth more efficient such as with analytics, A/B testing, and ad creative production.
When IronSource went public, it was evident that large sums of money would be flowing into the arms of employees, as many of them held options. IronSource themselves reported that more than 200 of its employees would become millionaires thanks to the IPO. This is one of the issues that arose for the company, and has plagued many others in the field.
Unity is a giant in the field of graphics, and allows the creation of games, movies, simulations and more in 3D. In December 2020, Unity acquired its first Israeli startup – RestAR – which became its R&D center in Israel. Unity is currently traded at a value of about $12 billion, but also suffered from the fall in shares (in December 2020, when it acquired the Israeli startup, it was worth $40 billion). Upon completion of the transaction, Unity will hold 73.5% of the subsidiary while Iron Source will hold 26.5%.
John Riccitello, CEO of Unity, said in response to the deal: “We believe the world is a better place with more successful creators within it. The merger of Unity and IronSource will better support creators of all kinds by giving them all the tools they need to create and grow successful applications in games and other consumer-facing industries such as e-commerce." Riccitello added:"This is a step forward towards realizing our vision of a fully integrated platform that helps creators at every stage of their RT3D journey. We look forward to welcoming Tomer Bar-Zeev, CEO of IronSource, and the rest of IronSource’s talented team to the Unity family."