Acquisitions

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Completed acquisition

MindKick, Inc.

On January 28, 2022, we completed the purchase of MindKick, Inc. ("MindKick") for a total purchase consideration of approximately $46.6 million. This amount was payable in a combination of approximately $26.7 million in cash and the issuance of 169,321 shares of common stock valued at approximately $16.1 million. An additional 42,330 shares of common stock subject to a service-based vesting condition were granted to certain employees of Mindkick; these shares of common stock are accounted for outside of the business combination and will be recognized as post-combination expense. MindKick provides 2D game creation tools and game templates with the goal of providing consumers the ability to create, play, and share their own 2D games on mobile. Prior to the completion of the acquisition, we held a minority investment in MindKick that we accounted for using the equity method of accounting. In circumstances where a business combination is achieved in stages, previously-held equity interests are remeasured at fair value. The remeasured fair value assigned to the previously-held equity interest in MindKick approximates cost, and therefore, no gain or loss was recognized.

The following table summarizes the consideration paid for MindKick and the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):


Consideration:
Cash	$	26,740
Common stock issued	16,072
Fair value of previously held interest	3,747
Fair value of total consideration transferred	$	46,559
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	2,789
Intangible assets	7,450
Deferred tax liability	(685)
Other assets and liabilities, net	(14)
Total identifiable net assets assumed	9,540
Goodwill (1)	37,019
Total	$	46,559

(1) Goodwill reflects the expected future benefits of certain synergies and acquired assembled workforce, which does not qualify for separate recognition as an identifiable intangible asset. The goodwill balance is not subject to amortization, and it is not deductible for U.S. income tax purposes

The transaction costs associated with the acquisition are not material.

The revenue and earnings of the acquired business have been included in our results since the acquisition date and are not material to our consolidated results.

Pending acquisition

On July 13, 2022, we entered into an Agreement and Plan of Merger to acquire ironSource Ltd ("ironSource"), a leading business platform for the app economy. The estimated purchase consideration is based on an exchange ratio of 0.1089 shares of Unity in exchange for shares of ironSource. As of August 8, 2022, this exchange ratio would translate to a purchase price of approximately $5.8 billion payable in common stock. The actual purchase consideration will change based on fluctuations in the share price of our common stock and the number of shares of ironSource outstanding on the closing date. The transaction, which is anticipated to close in the fourth quarter of this year, is subject to approval by ironSource and Unity stockholders, the receipt of required regulatory approvals, and other customary closing conditions. Additionally, we entered into an investment agreement with certain investors relating to the sale and issuance of $1.0 billion in aggregate principal amount of convertible senior notes due in 2027 (the "Notes"). The closing of the issuance and sale of the Notes is contingent upon closing of the acquisition of ironSource. The proceeds from the issuance and sale of the Notes are expected to be used to partially fund a plan to repurchase of up to $2.5 billion of shares of Unity Common Stock in open market transactions following the acquisition of ironSource.