Delaware | | | 7372 | | | 27-0334803 |
(State or other jurisdiction of incorporation or organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) |
David P. Slotkin Emily K. Beers Morrison & Foerster LLP 2100 L Street, NW Suite 900 Washington, D.C. 20037 Tel: (202) 887-1500 | | | Eric T. McCrath Morrison & Foerster LLP 425 Market Street San Francisco, CA 94105 Tel: (415) 268-7000 | | | Tomer Bar-Zeev Chief Executive Officer ironSource Ltd. 121 Menachem Begin Street Tel Aviv 6701203, Israel Tel: + 972-747990001 | | | Joshua G. Kiernan Michael J. Rosenberg Latham & Watkins LLP 99 Bishopsgate London EC2M 3XF United Kingdom Tel: (+44) (20) 7710-1000 | | | Joshua M. Dubofsky Max Schleusener Latham & Watkins LLP 1271 Avenue of the Americas New York, New York 10020 Tel: (212) 906-1200 |
Hanan Haviv Yuval Meiadr Herzog Fox & Neeman Herzog Tower, 6 Yitzhak Sadeh St. Tel Aviv 6777506, Israel Tel: +972 (3) 692 2020 | | | Dan Shamgar Talya Gerstler Jonathan M. Nathan Elad Ziv Meitar | Law Offices 16 Abba Hillel Road Ramat Gan, 5250608, Israel Tel: +972 (3) 610-3100 |
Large accelerated filer | | | ☒ | | | Accelerated filer | | | ☐ | | | Non-accelerated filer | | | ☐ | | | Smaller reporting company | | | ☐ |
| | | | | | | | | | | | Emerging growth company | | | ☐ |
| |
Sincerely, | | | Sincerely, |
| | ||
| |||
| |||
John Riccitiello | | | Tomer Bar-Zeev |
President and Chief Executive Officer | | | Chief Executive Officer |
Unity Software Inc. | | | ironSource Ltd. |
• | to approve the issuance of shares of Unity common stock (which we refer to as the “Unity issuance proposal”) in connection with the merger contemplated by the Agreement and Plan of Merger, dated July 13, 2022 (which, as it may be amended from time to time, we refer to as the “merger agreement”), by and among Unity, ironSource Ltd. (which we refer to as “ironSource”) and Ursa Aroma Merger Subsidiary Ltd. (which we refer to as “Merger Sub”), a direct wholly owned subsidiary of Unity; and |
• | to approve the adjournment of the Unity special meeting, if necessary, to solicit additional proxies if there are not sufficient votes to approve the Unity issuance proposal at the time of the Unity special meeting (which we refer to as the “Unity adjournment proposal”). |
| | BY ORDER OF THE BOARD OF DIRECTORS, | |
| | ||
| |||
| |||
| | Nora Go | |
| | Assistant Corporate Secretary | |
| | Unity Software Inc. | |
| | San Francisco, California |
• | the majority vote obtained in favor of the ironSource merger proposal also includes a majority of the shares held by shareholders who are not deemed to have a personal interest (as defined under the Companies Law) in the approval of the proposal that are voted at the applicable ironSource meeting, excluding abstentions and broker non-votes; or |
• | the total number of shares held by such non-conflicted shareholders (as described in the immediately preceding bullet-point) voted against the ironSource merger proposal does not exceed 2% of the aggregate voting power in ironSource (on a per class or combined class basis). |
(i) | If you hold your shares in “street name” through a broker, bank or other nominee on the New York Stock Exchange, please vote in accordance with the instructions on the nominee’s voting instruction form(s), which may include instructions about voting by telephone or over the Internet (at www.proxyvote.com). If you hold your shares in “street name,” you may also vote your shares in person at the ironSource meeting, but you must obtain a “legal proxy” from the bank, broker or other nominee that holds your shares directly, giving you the right to vote the shares at the meeting, including a proof of ownership form as of the record date. |
(ii) | If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, you are considered, with respect to those shares, the shareholder of record. In such case, these proxy materials are being sent directly to you. As the shareholder of record, you have the right to use the proxy card(s), once it/they become available, to grant your voting proxy or proxies directly to Ms. Dalia Litay, the General Counsel of ironSource, or to vote in person at the ironSource meeting. If you mail your proxy card(s) in the self-addressed, stamped envelope(s) to be enclosed with the proxy statement, it or they must be received by ironSource’s transfer agent not later than 11:59 p.m., Eastern Standard Time, on , 2022, to be validly included in the applicable tallies of ironSource ordinary shares voted at the meeting. Alternatively, if you are delivering or mailing your proxy or proxies to ironSource’s offices in Israel (to the address given above), it or they must be received by a.m. (Israel time), on , 2022. |
For Unity Stockholders: Unity Software Inc. 30 3rd Street San Francisco, California 94103 Attention: Corporate Secretary Telephone: (415) 539-3162 | | | For ironSource Shareholders: ironSource Ltd. 121 Menachem Begin Street Tel Aviv 6701203, Israel Attention: Investor Relations Telephone: +972-74-799-0001 |
Q: | Why am I receiving this joint proxy statement/prospectus? |
A: | You are receiving this joint proxy statement/prospectus because Unity and ironSource have entered into the merger agreement, pursuant to which, on the terms and subject to the conditions included in the merger agreement, Merger Sub, a direct wholly owned subsidiary of Unity, will merge with and into ironSource with ironSource continuing in existence as the surviving company and a direct wholly owned subsidiary of Unity (the “merger”). Your vote is required in connection with the merger and Unity and ironSource are sending these materials to their respective security holders to help them decide how to vote their shares with respect to the issuance of shares of Unity common stock in connection with the merger, in the case of Unity, the approval of the merger and merger agreement, in the case of ironSource, and other important matters. The merger agreement, which governs the terms of the merger, is attached to this joint proxy statement/prospectus as Annex A. |
Q: | When and where will the Unity special meeting take place? |
A: | The Unity special meeting will be held virtually at a.m., Pacific Time, on , 2022, via a live interactive audio webcast on the Internet. You will be able to vote and submit your questions at www.U2022SM.com during the Unity special meeting. There will not be a physical location for the Unity special meeting. The virtual nature of the Unity special meeting is generally designed to enable participation of and access by more of Unity stockholders while decreasing the cost of conducting the Unity special meeting. Unity stockholders will be able to virtually attend and vote at the Unity special meeting by visiting www.U2022SM.com, which is referred to as the “Unity special meeting website.” To attend the Unity special meeting, you must pre-register at www.U2022SM.com by a.m., Pacific Time, on , 2022. For additional information on how to pre-register for the Unity special meeting, see the section titled “The Unity Special Meeting—Pre-Registering for the Unity Special Meeting.” |
Q: | What matters will be considered at the Unity special meeting? |
A: | The Unity stockholders are being asked to consider and vote on: |
• | a proposal to approve the issuance of shares of Unity common stock in connection with the merger (which we refer to as the “Unity issuance proposal”); and |
• | a proposal to approve the adjournment of the Unity special meeting, if necessary, to solicit additional proxies if there are not sufficient votes to approve the Unity issuance proposal at the time of the Unity special meeting (which we refer to as the “Unity adjournment proposal”). |
Q: | Is my vote important? |
A: | Yes. Your vote is very important. The merger cannot be completed unless the Unity issuance proposal is approved by the affirmative vote of the holders of a majority of the voting power of the shares present in |
Q: | What is a “broker non-vote”? |
A: | Under NYSE rules, banks, brokers and other nominees may use their discretion to vote “uninstructed” shares (i.e., shares of record held by banks, brokers or other nominees, but with respect to which the beneficial owner of such shares has not provided instructions on how to vote on a particular proposal) with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. All of the proposals currently expected to be voted on at the Unity special meeting are “non-routine” matters. |
Q: | If my shares of Unity common stock are held in “street name” by my broker, bank or other nominee, will my broker, bank or other nominee automatically vote those shares for me? |
A: | If your shares are held through a broker, bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” You are not considered the “record holder” of those shares. If this is the case, this joint proxy statement/prospectus has been forwarded to you by your broker, bank or other nominee. If you hold your shares in “street name,” you must provide your broker, bank or other nominee with instructions on how to vote your shares. Otherwise, your broker, bank or other nominee cannot vote your shares on any of the proposals to be considered at the Unity special meeting. |
Q: | What Unity stockholder vote is required for the approval of the Unity issuance proposal and the Unity adjournment proposal? |
A: | The Unity issuance proposal. Approval of the Unity issuance proposal requires the affirmative vote of the holders of a majority of the voting power of the shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the Unity special meeting and entitled to vote generally on such proposal. Abstentions will have the same effect as votes “AGAINST” the proposal. |
Q: | Who will count the votes? |
A: | The votes at the Unity special meeting will be counted by , which will serve as an independent inspector of elections. |
Q: | What will ironSource shareholders receive if the merger is completed? |
A: | As a result of the merger, each ironSource ordinary share issued and outstanding immediately prior to the effective time of the merger (subject to certain exceptions set forth in the merger agreement) will be converted into the right to receive 0.1089 of a share of Unity common stock (which we refer to as the |
Q: | What equity stake will ironSource shareholders hold in Unity immediately following the merger? |
A: | Based on the number of shares of Unity common stock and ironSource ordinary shares outstanding as of July 15, 2022, the latest practicable date prior to the date of this joint proxy statement/prospectus, it is expected that Unity will issue approximately 111.4 million shares of Unity common stock in the merger, after which current Unity stockholders would own approximately 72.8% of the outstanding shares of Unity common stock and former ironSource shareholders would own approximately 27.2% of the outstanding shares of Unity common stock. At closing of the merger, on a fully diluted basis, current Unity stockholders are expected to own approximately 73.5% of the outstanding shares of Unity common stock and former ironSource shareholders are expected to own approximately 26.5% of the outstanding shares of Unity common stock. The exact equity stake of ironSource shareholders in Unity immediately following the effective time of the merger will depend on the number of shares of Unity common stock, ironSource ordinary shares and eligible ironSource equity awards issued and outstanding immediately prior to the effective time of the merger, as provided in the section titled “The Merger Agreement—Effect of the Merger on ironSource Ordinary Shares; Merger Consideration” beginning on page 128. |
Q: | Will there be any changes to the Unity board and management following the merger? |
A: | In connection with the merger, prior to the closing of the merger, (a) Unity will take all necessary corporate action so that, upon and after the closing of the merger, the size of the Unity board will be increased by three members (to a total of thirteen members), (b) Unity will designate three individuals, one of whom will be the Chief Executive Officer of ironSource and the other two of whom will be members of the ironSource board as of the date of the merger agreement and selected by ironSource upon prior consultation with Unity, (c) Unity will designate such three individuals to be appointed to the Unity board to fill the vacancies created by such increase (which we refer to as the “ironSource Nominees”) and (d) Unity will appoint the ironSource Nominees to the Unity board, in different classes, with such appointments effective upon the closing of the merger. Immediately following the effective time of the merger, all ten current Unity directors, Roelof Botha, Egon Durban, David Helgason, Alyssa Henry, Michelle K. Lee, John Riccitiello, Barry Schuler, Robynne Sisco, Mary Schmidt Campbell, Ph.D and Keisha Smith-Jeremie, are expected to continue as directors of Unity. |
Q: | How does the Unity board recommend that I vote? |
A: | The Unity board unanimously recommends that Unity stockholders vote “FOR” the Unity issuance proposal and “FOR” the Unity adjournment proposal. For additional information regarding how the Unity board recommends that Unity stockholders vote, see the section titled “The Merger—Recommendation of the Unity Board of Directors and Unity’s Reasons for the Merger” beginning on page 90. |
Q: | Why are the Unity stockholders being asked to vote on the Unity adjournment proposal? |
A: | In the event that there are not sufficient votes to approve the Unity issuance proposal at the Unity special meeting, Unity will seek the Unity stockholders’ approval of an adjournment of the Unity special meeting to solicit additional proxies to approve the Unity issuance proposal at a later Unity special meeting. |
Q: | If the Unity special meeting is adjourned or postponed, do I need to send new proxies? |
A: | At any subsequent reconvening of the Unity special meeting, all proxies will be voted in the same manner as they would have been voted at the original convening of the Unity special meeting, except for any proxies that have been validly revoked or withdrawn prior to the subsequent reconvening of the Unity special meeting. |
Q: | Who is entitled to vote at the Unity special meeting? |
A: | The Unity board has fixed , 2022 as the record date for the Unity special meeting (which we refer to as the “Unity record date”). All stockholders of record of Unity common stock as of the close of business on the Unity record date are entitled to receive notice of, and to vote at, the Unity special meeting, provided that those shares remain outstanding on the date of the Unity special meeting. As of July 15, 2022, the latest practicable date prior to the date of this joint proxy statement/prospectus, there were 298,106,454 shares of Unity common stock outstanding. Attendance at the virtual Unity special meeting is not required to vote. Instructions on how to vote your shares without attending the virtual Unity special meeting are provided below. |
Q: | How many votes do I have? |
A: | Each Unity stockholder of record is entitled to one vote for each share of Unity common stock held of record by the stockholder as of the close of business on the Unity record date. |
Q: | Are there any voting agreements in relation to the merger? |
A: | ironSource Voting Agreements |
Q: | What constitutes a quorum for the Unity special meeting? |
A: | A quorum is the minimum number of stockholders necessary to hold a valid meeting. |
Q: | What will happen to ironSource as a result of the merger? |
A: | If the merger is completed, Merger Sub, a wholly owned subsidiary of Unity, will merge with and into ironSource, with ironSource continuing in existence as the surviving company and a direct wholly owned subsidiary of Unity. Following the completion of the proposed merger, the registration of ironSource Class A ordinary shares and ironSource’s reporting obligations under the Exchange Act will be terminated. ironSource Class A ordinary shares will no longer be publicly traded and will be delisted from the NYSE. ironSource shareholders are expected to be able to continue to trade their ironSource Class A ordinary shares on the NYSE until the closing date of the merger. |
Q: | Where will the Unity common stock that ironSource shareholders receive in the merger be publicly traded? |
A: | Assuming the merger is completed, the shares of Unity common stock that ironSource shareholders receive in the merger will be listed and traded on the NYSE. |
Q: | What happens if the merger is not completed? |
A: | If the ironSource merger proposal is not approved by ironSource shareholders or if the Unity issuance proposal is not approved by Unity stockholders or if the merger is not completed for any other reason, ironSource shareholders will not receive any merger consideration in connection with the merger, and their ironSource ordinary shares will remain outstanding. ironSource will remain an independent public company and ironSource Class A ordinary shares will continue to be listed and traded on the NYSE. Additionally, if the ironSource merger proposal is not approved by ironSource shareholders or if the merger is not completed for any other reason, Unity will not issue shares of Unity common stock to ironSource shareholders, regardless of whether the Unity issuance proposal is approved. If the merger agreement is terminated under specified circumstances, either ironSource or Unity (depending on the circumstances) may be required to pay the other party a termination fee or other termination-related payment. For a more detailed discussion of the termination fees, see “The Merger Agreement—Termination” beginning on page 156. |
Q: | What is a proxy and how can I vote my shares via the Unity special meeting website? |
A: | A proxy is a legal designation of another person to vote the stock you own. |
Q: | How can I vote my shares without attending the Unity special meeting? |
A: | If you are a stockholder of record of Unity common stock as of the close of business on the Unity record date, you can vote by proxy by phone, the Internet or mail by following the instructions provided in the enclosed proxy card. Please note that if you are a beneficial owner who holds shares in “street name”, you must vote by submitting voting instructions to your broker, bank or other nominee, or otherwise by following instructions provided by your broker, bank or other nominee. Phone and Internet voting may be available to beneficial owners. Please refer to the vote instruction form provided by your broker, bank or other nominee. |
Q: | What is the difference between holding shares as a holder of record and as a beneficial owner who holds shares in “street name”? |
A: | If your shares of Unity common stock are registered directly in your name with Unity’s transfer agent, Computershare Trust Company, N.A., you are considered the stockholder of record with respect to those shares, and access to proxy materials is being provided directly to you. If your shares are held in a stock brokerage account or by a broker, bank or other nominee, then you are considered the beneficial owner of those shares, which are considered to be held in “street name” and access to proxy materials is being provided to you by your broker, bank or other nominee. |
Q: | What should I do if I receive more than one set of voting materials? |
A: | You may receive more than one set of voting materials relating to the Unity special meeting if you hold shares of Unity common stock in “street name” or if you hold shares of Unity common stock directly in your name as a stockholder of record or shareholder of record, as applicable, or otherwise or if you hold shares of Unity common stock in more than one brokerage account. |
Q: | I hold shares of both Unity common stock and ironSource ordinary shares. Do I need to vote separately for each company? |
A: | Yes. You will need to separately follow the applicable procedures described in this joint proxy statement/prospectus both with respect to the voting of shares of Unity common stock and with respect to the voting of ironSource ordinary shares in order to effectively vote the shares you hold in each company. |
Q: | If a holder of shares gives a proxy, how will the shares of Unity common stock covered by the proxy be voted? |
A: | If you provide a proxy, regardless of whether you provide that proxy by phone, the Internet or by completing and returning the applicable enclosed proxy card, the individuals named on the enclosed proxy card will vote your shares of Unity common stock in the way that you indicate when providing your proxy in respect of the shares you hold. When completing the phone or Internet processes or the proxy card, you may specify whether your shares of Unity common stock should be voted for or against, or abstain from voting on, all, some or none of the specific items of business to come before the Unity special meeting. |
Q: | How will my shares be voted if I return a blank proxy? |
A: | If you sign, date and return your proxy and do not indicate how you want your shares of Unity common stock to be voted, then your shares of Unity common stock will be voted “FOR” the Unity issuance proposal and “FOR” the approval of the Unity adjournment proposal, in accordance with the recommendation of the Unity board. |
Q: | Can I change my vote after I have submitted my proxy? |
A: | Yes. If you are a stockholder of record of Unity common stock as of the close of business on the Unity record date, whether you vote by phone, the Internet or mail, you can change or revoke your proxy before it is voted at the Unity special meeting in one of the following ways: |
• | submit a new proxy card bearing a later date; |
• | vote again by phone or the Internet at a later time; |
• | give written notice of your revocation to Unity’s corporate secretary at 30 3rd Street, San Francisco, California 94103 stating that you are revoking your proxy; or |
• | vote at the virtual Unity special meeting. Please note that your attendance at the virtual Unity special meeting will not alone serve to revoke your proxy. |
Q: | Where can I find the voting results of the Unity special meeting? |
A: | Within four business days following certification of the final voting results, Unity intends to file the final voting results (or, if the final voting results have not yet been certified, the preliminary results) of the Unity special meeting with the SEC in a Current Report on Form 8-K. |
Q: | If I do not favor the merger as a Unity stockholder what are my rights? |
A: | Under Delaware law, Unity stockholders are not entitled to appraisal rights in connection with the issuance of shares of Unity common stock as contemplated by the merger agreement. |
Q: | Are there any risks that I should consider as a Unity stockholder in deciding how to vote? |
A: | Yes. You should read and carefully consider the risk factors set forth in the section titled “Risk Factors” beginning on page 41. You also should read and carefully consider the risk factors of Unity contained in the documents that are incorporated by reference in this joint proxy statement/prospectus. |
Q: | What happens if I sell my shares before the special meetings? |
A: | The record date for Unity stockholders entitled to vote at the Unity special meeting is earlier than the date of the Unity special meeting. If you transfer your shares of Unity common stock after the Unity record date but before the Unity special meeting, you will, unless special arrangements are made, retain your right to vote at the Unity special meeting. |
Q: | When is the merger expected to be completed? |
A: | Unity and ironSource are working to complete the merger as quickly as possible. Subject to the satisfaction or waiver of the conditions described in the section titled “The Merger Agreement—Conditions to the Completion of the Merger” beginning on page 154, including the approval of the ironSource merger proposal by ironSource shareholders at the ironSource special general meeting and the approval of the Unity issuance proposal by Unity stockholders at the Unity special meeting, the transaction is expected to be completed in the fourth quarter of 2022. However, neither Unity nor ironSource can predict the actual date on which the merger will be completed, nor can the parties assure that the merger will be completed, because completion is subject to conditions beyond either Unity’s or ironSource’s control. |
Q: | What is “householding”? |
A: | Unity has adopted a procedure called “householding,” which the SEC has approved. Under this procedure, Unity delivers a single copy of the notice and proxy materials to multiple Unity stockholders who share the same address, unless Unity has received contrary instructions from one or more of such stockholders. This procedure reduces printing costs, mailing costs and fees. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, Unity will deliver promptly a separate copy of the notice and proxy materials to any Unity stockholder at a shared address to which Unity delivered a single copy of any of these materials. “Street name” Unity stockholders may contact their broker, bank, or other nominee to request information about householding. |
Q: | Who will solicit and pay the cost of soliciting proxies? |
A: | Unity has engaged , which is referred to as “ ,” to assist in the solicitation of proxies for the Unity special meeting. Unity estimates that it will pay a fee of approximately $ , plus reimbursement for certain out-of-pocket fees and expenses. Unity has agreed to indemnify against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). Unity also may reimburse banks, brokers and other custodians, nominees and fiduciaries or their respective agents for their expenses in forwarding proxy materials to beneficial owners of Unity common stock. Unity directors, officers and employees also may solicit proxies by telephone, by electronic means or in person. They will not be paid any additional amounts for soliciting proxies. |
Q: | What should I do now? |
A: | You should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, and return your completed, signed and dated proxy card by mail in the enclosed postage-paid envelope or submit your voting instructions by phone or Internet as soon as possible so that your shares of Unity common stock will be voted in accordance with your instructions. |
Q: | Who can answer my questions about the Unity special meeting or the transactions contemplated by the merger agreement? |
A: | If you have questions about the Unity special meeting or the information contained in this joint proxy statement/prospectus, or desire additional copies of this joint proxy statement/prospectus or additional proxies, you should contact: |
Q: | Where can I find more information about Unity, ironSource and the merger? |
A: | You can find out more information about Unity, ironSource and the merger by reading this joint proxy statement/prospectus and, with respect to Unity and ironSource, from various sources described in the sections titled “Where You Can Find More Information” and “Information Incorporated by Reference,” beginning on pages 204 and 205, respectively. |
Q: | Why am I receiving this joint proxy statement/prospectus? |
A: | ironSource and Unity have entered into a merger agreement pursuant to which Merger Sub will merge with and into ironSource, subject to certain conditions. Upon the completion of the merger, ironSource will become a direct wholly owned subsidiary of Unity. ironSource is holding a special general meeting of its shareholders, or the ironSource special general meeting, in order to obtain shareholder approval (including separate class approvals at meetings of each of the ironSource Class A ordinary shares and ironSource Class B ordinary shares, and the approval of a combined meeting of those classes, all to be held at the ironSource special general meeting) of the merger agreement, the transactions contemplated under the merger agreement, including the merger, and the merger consideration payable to ironSource’s shareholders. |
Q: | When and where will the ironSource special general meeting be held? |
A: | The ironSource special general meeting is scheduled to be held at the principal executive offices of ironSource, located at 121 Menachem Begin Street, Tel Aviv 6701203, Israel, at , (Israel time), on , 2022. |
Q: | Who is entitled to vote at the ironSource special general meeting? |
A: | ironSource has fixed , 2022 as the record date for the ironSource special general meeting (referred to as the “ironSource record date”). If you were an IronSource shareholder at the close of business on the ironSource record date, you are entitled to vote on matters that come before the ironSource special general meeting. |
Q: | What matters will be considered at the ironSource special general meeting? |
A: | You will be asked to consider and vote on a proposal to approve the merger of ironSource with a wholly owned subsidiary of Unity, including approval of the merger agreement, the merger, the merger consideration (as described below), and all other transactions and arrangements contemplated under the merger agreement. We refer to this proposal as the ironSource merger proposal. |
Q: | What will I receive in the merger? |
A: | Upon the completion of the merger, you will be entitled to receive the merger consideration, consisting of 0.1089 of a share of Unity common stock, rounded up or down to the nearest whole share for any |
Q: | How will I receive the merger consideration to which I am entitled? |
A: | If you are a holder of certificates that represent eligible ironSource ordinary shares (which we refer to as “ironSource ordinary share certificates”), a notice advising you of the effectiveness of the merger and a letter of transmittal and instructions for the surrender of your ironSource ordinary share certificates will be mailed to you as soon as practicable after the effective time of the merger. After receiving proper documentation from you, an exchange agent will send to you (i) a statement reflecting the aggregate whole number of shares of Unity common stock (which will be in uncertificated book-entry form) that you have a right to receive pursuant to the merger agreement and (ii) a check in the amount equal to the cash payable in lieu of any dividends or other distributions on the shares of Unity common stock issuable to you as merger consideration. |
Q: | What is the recommendation of the ironSource board? |
A: | The ironSource board (excluding directors who may be deemed to have a personal interest, as defined under the Companies Law, concerning the merger) unanimously recommends that you vote “FOR” the ironSource merger proposal. |
Q: | What votes of ironSource shareholders are required to complete the merger? |
A: | The approval of the ironSource merger proposal requires three different class-related or combined at special general meetings under ironSource’s articles of association, as amended, and the Companies Law. Each of those votes will take place and each of those meetings will be held at the ironSource special general meeting. The affirmative vote of the holders of a majority of the voting power represented at the ironSource special general meeting in person or by proxy and voting thereon, excluding abstentions and broker non-votes, of each of the following constitute the foregoing required class-related or combined approvals: |
(1) | the ironSource Class A ordinary shares, voting as a separate class at a separate meeting; |
(2) | the ironSource Class B ordinary shares, voting as a separate class at a separate meeting, and |
(3) | the ironSource Class A ordinary shares and ironSource Class B ordinary shares, voting together as a single class at a combined meeting. |
• | the majority voted in favor of the proposal, which includes a majority of the shares held by shareholders who are not deemed to have a personal interest (as defined under the Companies Law) in the approval of the ironSource merger proposal that are voted at the applicable ironSource meeting, excluding abstentions and broker non-votes; or |
• | the total number of shares held by non-conflicted shareholders (as described in the previous bullet-point) voted against the ironSource merger proposal does not exceed 2% of the aggregate voting power in ironSource (on a per class or combined class basis). |
Q: | What is the quorum required for holding the ironSource special general meeting? |
A: | Pursuant to ironSource’s articles of association, the quorum required for the ironSource special general meeting—in order to hold each of the two separate class meetings and the combined meetings required for |
Q: | Am I entitled to appraisal rights? |
A: | No. Under Israeli law, holders of ironSource ordinary shares are not entitled to statutory appraisal rights in connection with the merger. |
Q: | Will I be able to continue to trade my ironSource Class A ordinary shares on the NYSE following the ironSource special general meeting? |
A: | ironSource shareholders are expected to be able to continue to trade their ironSource Class A ordinary shares on the NYSE until the closing date of the merger. ironSource Class A ordinary shares will no longer be publicly traded and will be delisted from the NYSE upon the closing of the merger. |
Q: | Will the shares of Unity common stock issued in the merger receive a dividend? |
A: | After the completion of the merger, the shares of Unity common stock issued in connection with the merger will carry with them the right to receive the same dividends (if any) on shares of Unity common stock as the shares of Unity common stock held by all other holders of such shares for any dividend the record date for which occurs after the merger is completed. |
Q: | What effects will the proposed merger have on ironSource? |
A: | As a result of the proposed merger, ironSource will cease to be a publicly-traded company and will become a direct wholly owned subsidiary of Unity. Following the completion of the proposed merger, the registration of ironSource Class A ordinary shares and ironSource’s reporting obligations under the Exchange Act will be terminated upon notification to the SEC. In addition, upon completion of the proposed merger, ironSource Class A ordinary shares will no longer be listed on any stock exchange, including the NYSE. |
Q: | What happens if the merger is not completed? |
A: | If the merger agreement is not approved by ironSource’s shareholders or if the merger is not completed for any other reason, ironSource shareholders will not receive any merger consideration for their ironSource ordinary shares. Instead, ironSource will remain a public company and ironSource Class A ordinary shares will continue to be listed and traded on the NYSE. Under certain circumstances related to the termination of the merger agreement, as specified therein, either ironSource or Unity (depending on the circumstances) may be required to pay to the other party a termination fee or other termination-related fees. Please see “The Merger Agreement—Termination—Termination Fees” for a summary description of these circumstances. |
Q: | What are the material Israeli income tax consequences of the merger to ironSource shareholders? |
A: | Generally, the exchange of ironSource ordinary shares for the merger consideration would be treated as a sale and subject to Israeli tax both for Israeli and non-Israeli resident shareholders of ironSource. However, certain relief and/or exemptions may be available under Israeli law or under applicable tax treaties. In addition, ironSource, with the assistance of Unity, has submitted an application for a ruling from the ITA confirming that (i) the exchange of ironSource ordinary shares for the merger consideration as a tax free reorganization pursuant to Section 103K of the ITO, and (ii) as such, no withholding is required, all subject to the conditions to be detailed in such ruling. Obtaining the 103K tax ruling is ironSource’s closing condition to the consummation of the merger. |
Q: | What will happen to outstanding ironSource options and restricted share units (“RSUs”)? |
A: | It depends on the status of the service provider and the option or RSU, as applicable. |
Q: | What will happen to the ironSource 2021 Employee Share Purchase Plan? |
A: | The ironSource 2021 Employee Share Purchase Plan (the “ironSource ESPP”) will be terminated prior to the effective time of the merger. |
Q: | How can I vote? |
A: | Beneficial Owners: If you hold your ironSource shares in “street name” through a broker, bank or other nominee on the NYSE, please vote in accordance with the instructions on the nominee’s voting instruction form. If you receive a physical voting instruction form, you may complete it and mail it in the self-addressed envelope that is enclosed. If you received an email copy of the voting instruction form, or if you otherwise desire to submit voting instructions by telephone or over the Internet (at www.proxyvote.com), please follow the directions that you received. The deadline for receipt of your voting instructions will be 11:59 p.m. Eastern Standard Time on , 2022. |
Q: | What happens if I do not indicate how to vote on the proxy card or voting instruction form? |
A: | If you are a shareholder of record and provide specific instructions (by marking a box on your proxy card) with regard to the ironSource merger proposal, your shares will be voted as you instruct. If you sign and return your proxy card without giving specific instructions, your shares will not be voted on the ironSource merger proposal, unless you provide both the required confirmation under Item 1A of the proxy card that you are not a Unity Affiliate and the required confirmation under Item 1B of the proxy card that you lack a personal interest in the approval of the ironSource merger proposal (in which case your proxy card will be voted “FOR” the ironSource merger proposal, as recommended by the ironSource board). |
Q: | If my ironSource shares are held in “street name” by my bank, broker or other nominee, will my broker vote my shares for me? |
A: | Your bank, broker or other nominee will not be able to vote your ironSource shares without instructions from you. You should instruct your bank, broker or other nominee to vote your shares by following the directions provided by your bank, broker or other nominee. Without instructions and without returning your voting instruction form, your shares will not be counted as present or voted at the ironSource special general meeting. |
Q: | Do ironSource’s executive officers and directors have any interest in the merger? |
A: | Yes. When considering the recommendation of the ironSource board that ironSource’s shareholders vote in favor of the approval of the ironSource merger proposal, ironSource shareholders should be aware that ironSource’s directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of ironSource shareholders generally. These interests include: |
• | each of Tomer Bar-Zeev, ironSource’s Chairman and Chief Executive Officer, Arnon Harish, ironSource’s President, and Eyal Milrad ironSource’s Chief Strategy Officer, is anticipated to agree with Unity on new employment terms for his employment, post-merger; |
• | Tomer Bar-Zeev, ironSource’s Chief Executive Officer is expected to be appointed to the Unity board upon consummation of the merger; and |
• | the former and current directors and officers of ironSource will be entitled to continued indemnification and the continuation of directors’ and officers’ liability insurance for a period of seven years after the merger. |
Q: | Can I change my vote after I have signed and returned my proxy card or voting instruction form? |
A: | Beneficial Owners: If your ironSource shares are held on the NYSE in a stock brokerage account or by a bank or other nominee, in order to change your voting instructions, you must follow the relevant directions from your broker, bank or other nominee, and must do so prior to the deadline for submitting voting instructions (i.e., by 11:59 p.m. Eastern Standard Time on , 2022). |
Q: | If I purchased my ironSource Class A ordinary shares after the ironSource record date, may I vote these shares at the ironSource special general meeting? |
A: | No. A shareholder is not entitled to vote shares purchased after the ironSource record date because the shareholder was not the record holder of those shares on the record date. Only the holder as of the ironSource record date may vote shares. However, such shareholder’s ironSource Class A ordinary shares (and, if the holder also holds them, ironSource Class B ordinary shares), if held as of the effective time of the merger, will be automatically converted into and represent the right to receive the per share merger consideration, consisting of 0.1089 of a share of Unity common stock per ironSource Class A ordinary share (and, if applicable, per ironSource Class B ordinary share) rounded up or down to the nearest whole share for any fractional shares of Unity common stock resulting from the calculation and, subject to the withholding of any applicable taxes. |
Q: | What happens if I sell my ironSource shares before the ironSource special general meeting? |
A: | The ironSource record date for the ironSource special general meeting is earlier than the date of the ironSource special general meeting and the date that the merger is expected to be completed. If you transfer your ironSource ordinary shares after the ironSource record date but before the ironSource special general meeting, you will retain your right to vote at the ironSource special general meeting, but will have transferred the right to receive the merger consideration with respect to such ironSource ordinary shares. In order to receive the merger consideration, you must hold your ironSource ordinary shares through the completion of the merger. |
Q: | Should I send in my ironSource share certificates now? When can I expect to receive the merger consideration for my shares? |
A: | No. Please do not send your ironSource share certificates with your proxy card or voting instruction form. |
Q: | What are the material U.S. federal income tax consequences of the merger to ironSource shareholders? |
A: | The parties intend the merger to qualify as a “reorganization” under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”) and/or Section 368(a)(2)(E) of the Code. Assuming the merger so qualifies, and subject to the discussion under “The Merger—Material U.S. Federal Income Tax Considerations—U.S. Federal Income Tax Consequences of the Merger” a U.S. Holder (as defined on page 162) of ironSource ordinary shares generally will not recognize gain or loss for U.S. federal income tax purposes on the exchange of ironSource ordinary shares for shares of Unity common stock pursuant to the merger. If the merger does not qualify as such a “reorganization” under Section 368(a)(1)(B) of the Code and/or Section 368(a)(2)(E) of the Code, the receipt of Unity common stock in exchange for ironSource ordinary shares in the merger would generally constitute a taxable exchange for U.S. federal income tax purposes and the tax consequences of the merger could materially differ from those described herein. |
Q: | How can I obtain additional information about ironSource? |
A: | ironSource’s Annual Report on Form 20-F for the year ended December 31, 2021, and other SEC filings may be accessed on the Internet at www.sec.gov or on the investor relations page of ironSource’s website at https://investors.is.com/. The information provided on our website is not part of this joint proxy statement/prospectus and therefore is not incorporated by reference herein. For a more detailed description of the information available, please refer to “Where You Can Find More Information.” |
Q: | What should I do if I have questions about the ironSource special general meeting, the merger or this document? |
A: | If you have any questions about the ironSource special general meeting, the merger or this document, or if you need additional copies of this document or the enclosed proxy card, you should contact: |
• | the ironSource Class A ordinary shares, voting as a separate class; |
• | the ironSource Class B ordinary shares, voting as a separate class; and |
• | the ironSource Class A ordinary shares and ironSource Class B ordinary shares, voting together as a single class, in which the ironSource Class A ordinary shares will be entitled to one vote per share and the ironSource Class B ordinary shares will be entitled to five votes per share |
• | the majority voted in favor of the ironSource merger proposal also includes a majority of the shares held by shareholders who are not deemed to have a personal interest (as defined under the Companies Law) in the approval of the proposal that are voted at the applicable ironSource meeting, excluding abstentions and broker non-votes; or |
• | the total number of shares held by non-conflicted shareholders (as described in the previous bullet-point) voted against the ironSource merger proposal does not exceed 2% of the aggregate voting power in ironSource (on a per class or combined class basis). |
• | ironSource shareholder approval and Unity stockholder approval. The Unity issuance proposal must have been approved by the requisite majority at the Unity special meeting (the “Unity stockholder approval”) and the ironSource merger proposal must have been approved by the requisite majorities of the class and combined meetings to be held at the ironSource special general meeting (the “ironSource shareholder approval”). |
• | NYSE Listing. The shares of Unity common stock to be issued in the merger will have been approved for listing on the NYSE (or any successor inter-dealer quotation system or stock exchange thereto) subject to official notice of issuance. |
• | Registration Statement. The registration statement of which this joint proxy statement/prospectus forms a part will have become effective under the Securities Act and will not be the subject of any stop order or any proceedings by the SEC seeking a stop order. |
• | Government Consents. The waiting period (or extensions thereof) under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) relating to the transactions contemplated by the merger agreement will have expired or been terminated. |
• | No Legal Prohibition. No governmental entity of competent jurisdiction will have (i) enacted, issued or promulgated any law that is in effect as of immediately prior to the effective time or (ii) issued or granted any order or injunction (whether temporary, preliminary or permanent) that is in effect as of immediately prior to the effective time, in each case, which has the effect of restraining, enjoining or otherwise prohibiting the consummation of the merger. |
• | ISA No-Action Letter; Dual-Listing. Unity will have obtained either the ISA No-Action Letter or a Dual Listing Permit (each as defined in “The Merger Agreement” beginning on page 151). |
• | Israeli Statutory Waiting Periods. At least 50 days will have elapsed after the filing of the ironSource merger proposal with the Companies Registrar of the State of Israel (referred to as the “Companies Registrar”) and at least 30 days will have elapsed after the ironSource shareholder approval and the approval by the sole shareholder of Merger Sub. |
• | Representations and Warranties of ironSource. The accuracy of representations and warranties of ironSource will be true and correct, subject in some instances to materiality or “material adverse effect” qualifiers, at and as of the effective date of the merger (other than representations that by their terms speak specifically as of another date or period of time). |
• | Performance of Obligations of ironSource. The obligations, covenants and agreements of ironSource to be performed on or before the closing in accordance with the merger agreement will have been performed in all material respects. |
• | No ironSource Material Adverse Effect. An ironSource material adverse effect (as defined in the merger agreement) will not have occurred on or after the date of the merger agreement that is continuing. |
• | ironSource Officer’s Certificate. Unity will have received a certificate, dated as of the closing date, signed by the Chief Executive Officer or Chief Financial Officer of ironSource certifying that each of the foregoing conditions has been satisfied. |
• | Israeli Tax Withholding. The receipt of a written ruling, confirmation or instruction of the ITA with respect to certain Israeli tax withholding obligations with respect to holders of ironSource ordinary shares. |
• | Representations and Warranties of Unity and Merger Sub. The accuracy of the representations and warranties of Unity and Merger Sub will be true and correct, subject in some instances to materiality or “material adverse effect” qualifiers, at and as of the effective date of the merger (other than representations that by their terms speak specifically as of another date or period of time). |
• | Performance of Obligations of Unity. The obligations, covenants and agreements of Unity and Merger Sub to be performed on or before the closing in accordance with the merger agreement will have been performed in all material respects. |
• | No Unity Material Adverse Effect. A Unity material adverse effect (as defined in the merger agreement) will not have occurred on or after the date of the merger agreement that is continuing. |
• | Unity Officer’s Certificate. ironSource will have received a certificate, dated as of the closing date, signed by the Chief Executive Officer or Chief Financial Officer of Unity certifying that each of the foregoing conditions has been satisfied. |
• | Israeli Tax Ruling. ironSource will have received certain tax rulings from the ITA, as described in the merger agreement. |
• | ironSource Nominees Appointment. Unity shall have complied in all respects with its obligations with respect to the ironSource nominees, as described in the merger agreement. |
• | Lock Up Undertakings. If required pursuant to the merger agreement, the agreements of certain shareholders of ironSource and certain stockholders of Unity containing certain restrictions on dispositions of their respective shares of Unity common stock shall be in full force and effect and not terminated or rescinded by the signatories thereto. |
• | ironSource has agreed that, between the date of the merger agreement and the earlier of the effective time or the date, if any, on which the merger agreement is validly terminated, ironSource will not, and will cause its controlled affiliates and its and their respective directors, officers and employees not to, and will instruct its and its controlled affiliates’ respective other representatives not to, directly or indirectly: |
• | solicit, initiate or knowingly encourage or facilitate (including by way of providing non-public information) any inquiry, proposal or offer, or the making, submission or announcement of any inquiry, proposal or offer, which constitutes or would reasonably be expected to lead to a ironSource Acquisition Proposal (as such term is defined in the section titled “The Merger Agreement—No Solicitation; Changes of Recommendation—Definitions of Competing Proposals” beginning on page 146) (subject to certain exceptions contained in the merger agreement); |
• | participate in any negotiations regarding, or furnish to any person any non-public information relating to, ironSource or any ironSource subsidiary in connection with an actual or potential ironSource Acquisition Proposal; |
• | adopt, approve, endorse or recommend, or propose to adopt, approve, endorse or recommend, any ironSource Acquisition Proposal; |
• | withdraw, change, amend, modify or qualify, or propose to withdraw, change, amend, modify or qualify, in a manner adverse to Unity, the recommendation of the ironSource board that ironSource shareholders provide the ironSource shareholder approval; |
• | if an ironSource Acquisition Proposal has been publicly disclosed, fail to publicly recommend against any such ironSource Acquisition Proposal within ten business days after the public disclosure of such ironSource Acquisition Proposal (or subsequently withdraw, change, amend, modify or qualify, in a manner adverse to Unity, such rejection of such ironSource Acquisition Proposal) and reaffirm the recommendation of the ironSource board that ironSource shareholders provide the ironSource shareholder approval within such ten business day period (or, if earlier, by the second business day prior to the ironSource special general meeting); |
• | fail to include the recommendation of the ironSource board that ironSource shareholders provide the ironSource shareholder approval in this joint proxy statement/prospectus; |
• | approve, or authorize, or cause ironSource or any ironSource subsidiary to enter into, any merger agreement, acquisition agreement, letter of intent, memorandum of understanding, agreement in |
• | call or convene a general meeting of ironSource shareholders to consider a proposal that would reasonably be expected to materially impair, prevent or delay the consummation of the transactions contemplated by the merger agreement; or |
• | resolve or agree to do any of the foregoing (any act described in the third through ninth bullets above is referred to as an “ironSource Change of Recommendation”). |
• | Notwithstanding the limitations contained in the merger agreement, prior to the ironSource shareholder approval being obtained (in each case, subject to certain limitations contained in the merger agreement): |
• | if ironSource receives an unsolicited, bona fide, written ironSource Acquisition Proposal that did not result from a breach of the merger agreement, which the ironSource board determines in good faith after consultation with ironSource’s outside legal counsel and financial advisers (i) constitutes an ironSource Superior Proposal (as such term is defined in the section titled “The Merger Agreement—No Solicitation; Changes of Recommendation—Definitions of Competing Proposals” beginning on page 146) or (ii) would reasonably be expected to result in an ironSource Superior Proposal and, in each case, that the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Israeli law (provided, however, that in order to determine the appropriate standards that would apply to such fiduciary duties, the ironSource board may also consider and act on the basis of the fiduciary duties owed by a board of directors to the shareholders of a company under Delaware law), then ironSource may take the following actions: |
○ | furnish nonpublic information with respect to ironSource and its subsidiaries to the person making such ironSource Acquisition Proposal (subject to certain confidentiality provisions described in the merger agreement)), and |
○ | engage in discussions or negotiations with such person with respect to such ironSource Acquisition Proposal; and |
• | the ironSource board may (in each case, subject to certain limitations and notice provisions contained in the merger agreement): |
○ | make an ironSource Change of Recommendation in response to certain intervening material events described in the merger agreement if the ironSource board has determined in good faith after consultation with ironSource’s outside legal counsel and financial advisers that the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Israeli law (provided, however, that in order to determine the appropriate standards that would apply to such fiduciary duties, the ironSource board may also consider and act on the basis of the fiduciary duties owed by a board of directors to the shareholders of a company under Delaware law); provided that: |
• | prior to ironSource taking any such action, ironSource will provide Unity with four business days’ prior written notice advising Unity that the ironSource board intends to effect a ironSource Change of Recommendation and specifying, in reasonable detail, the reasons therefor, and during such four business day period, ironSource will cause its representatives (including its executive officers) to negotiate in good faith (to the extent Unity desires to negotiate) any proposal by Unity to amend the terms and conditions of the merger agreement in a manner that would obviate the need to effect a ironSource Change of Recommendation and at the end of such four business day period the ironSource board again makes the determination to make such ironSource Change of Recommendation (after in good faith taking into account any amendments proposed by ironSource); or |
○ | make an ironSource Change of Recommendation and cause ironSource to terminate the merger agreement in order to enter into an acquisition agreement providing for an unsolicited ironSource Acquisition Proposal received after the date of the merger agreement (which did not result from a |
• | prior to ironSource taking any such action, ironSource will provide Unity with four business days’ prior written notice advising Unity that the ironSource board intends to take such action and specifying the material terms and conditions of the ironSource Acquisition Proposal, including a copy of any proposed definitive documentation, and during such four business day period, ironSource will cause its representatives (including its executive officers) to negotiate in good faith (to the extent Unity desires to negotiate) any proposal by Unity to amend the terms and conditions of the merger agreement such that such ironSource Acquisition Proposal would no longer constitute a ironSource Superior Proposal and at the end of such four business day period the ironSource board again makes such ironSource Change of Recommendation (after in good faith taking into account the amendments proposed by Unity). |
• | solicit, initiate or knowingly encourage or facilitate (including by way of providing non-public information) any inquiry, proposal or offer, or the making, submission or announcement of any inquiry, proposal or offer, which constitutes or would reasonably be expected to lead to a Unity Acquisition Proposal ((as such term is defined in the section titled “The Merger Agreement—No Solicitation; Changes of Recommendation—Definitions of Competing Proposals” beginning on page 146)) (subject to certain exceptions contained in the merger agreement); |
• | participate in any negotiations regarding, or furnish to any person any non-public information relating to, Unity or any Unity subsidiary in connection with an actual or potential Unity Acquisition Proposal; |
• | adopt, approve, endorse or recommend, or propose to adopt, approve, endorse or recommend, any Unity Acquisition Proposal; |
• | withdraw, change, amend, modify or qualify, or propose to withdraw, change, amend, modify or qualify, in a manner adverse to ironSource, the recommendation of the Unity board that Unity stockholders provide the Unity stockholder approval; |
• | if a Unity Acquisition Proposal has been publicly disclosed, fail to publicly recommend against any such Unity Acquisition Proposal within ten business days after the public disclosure of such Unity Acquisition Proposal (or subsequently withdraw, change, amend, modify or qualify, in a manner adverse to ironSource, such rejection of such Unity Acquisition Proposal) and reaffirm the recommendation of the Unity board that Unity stockholders provide the Unity stockholder approval within such ten business day period (or, if earlier, by the second business day prior to the Unity special meeting); |
• | fail to include the recommendation of the Unity board that stockholders provide the Unity stockholder approval in this joint proxy statement/prospectus; |
• | approve, or authorize, or cause Unity or any Unity subsidiary to enter into, any merger agreement, acquisition agreement, letter of intent, memorandum of understanding, agreement in principal, option agreement, joint venture agreement, partnership agreement or similar agreement or document providing for, any Unity Acquisition Proposal (other than certain acceptable confidentiality agreements described in the merger agreement); |
• | call or convene a general meeting of the stockholders of Unity to consider a proposal that would reasonably be expected to materially impair, prevent or delay the consummation of the transactions contemplated by the merger agreement; or |
• | resolve or agree to do any of the foregoing (any act described in the third through ninth bullets above is referred to as a “Unity Change of Recommendation”). |
• | Notwithstanding the limitations contained in the merger agreement, prior to the Unity stockholder approval being obtained (in each case, subject to certain limitations contained in the merger agreement): |
• | if Unity receives an unsolicited, bona fide, written Unity Acquisition Proposal that did not result from a breach of the merger agreement, which the Unity board determines in good faith after consultation with Unity’s outside legal counsel and financial advisers (i) constitutes a Unity Superior Proposal (as such term is defined in the section titled “The Merger Agreement—No Solicitation; Changes of Recommendation—Definitions of Competing Proposals”) or (ii) would reasonably be expected to result in a Unity Superior Proposal and, in each case, that the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Delaware law, then Unity may take the following actions: |
○ | furnish nonpublic information with respect to Unity and its subsidiaries to the person making such Unity Acquisition Proposal (subject to certain confidentiality provisions described in the merger agreement); and |
○ | engage in discussions or negotiations with such person with respect to such Unity Acquisition Proposal. |
• | the Unity board may (in each case, subject to certain limitations and notice requirements contained in the merger agreement): |
○ | make a Unity Change of Recommendation in response to certain intervening material events described in the merger agreement if the Unity board has determined in good faith after consultation with Unity’s outside legal counsel and financial advisers that the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Delaware law; provided that: |
• | prior to Unity taking any such action, Unity will provide ironSource with four business days’ prior written notice advising ironSource that the Unity board intends to effect a Unity Change of Recommendation and specifying, in reasonable detail, the reasons therefor, and during such four business day period, Unity will cause its representatives (including its executive officers) to negotiate in good faith (to the extent ironSource desires to negotiate) any proposal by ironSource to amend the terms and conditions of the merger agreement in a manner that would obviate the need to effect a Unity Change of Recommendation and at the end of such four business day period the Unity board again makes the determination to make such Unity Change of Recommendation (after in good faith taking into account any amendments proposed by ironSource); or |
○ | make a Unity Change of Recommendation and cause Unity to terminate the merger agreement in order to enter into a Unity acquisition agreement providing for an unsolicited Unity Acquisition Proposal received after the date of the merger agreement (which did not result from a breach of the merger agreement and such Unity Acquisition Proposal is not withdrawn) if the Unity board determines in good faith after consultation with Unity’s outside legal counsel and financial advisers that such Unity Acquisition Proposal constitutes a Unity Superior Proposal, but only if the Unity board has determined in good faith after consultation with Unity’s outside legal counsel and financial advisers that failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Delaware law; provided that: |
• | prior to Unity taking any such action, Unity will provide ironSource with four business days’ prior written notice advising ironSource that the Unity board intends to take such action and |
• | By mutual written consent of ironSource and Unity. |
• | By either ironSource or Unity: |
○ | if a governmental entity of competent jurisdiction issues a final, nonappealable order, injunction, decree or ruling in each case permanently restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the merger agreement; or |
○ | if the closing has not occurred on or before the Outside Date (as defined in the merger agreement), subject to certain exceptions described in the merger agreement; or |
○ | if the required ironSource shareholder approval or the Unity stockholder approvals are not obtained at the ironSource special general meeting of shareholders or the Unity special meeting of stockholders, respectively; or |
• | By ironSource: |
○ | in the event that (A) Unity and/or Merger Sub breaches, fails to perform or violates their respective covenants or agreements under the merger agreement or (B) any of the representations and warranties of Unity or Merger Sub set forth in the merger agreement becomes inaccurate, in either case subject to certain exceptions and qualifications described in the merger agreement, and such breach, failure to perform, violation or inaccuracy is not capable of being cured by the Outside Date or, if capable of being cured by the Outside Date, is not cured by Unity or Merger Sub, as applicable, before the date set forth in the merger agreement, provided that ironSource will not have the right to terminate the merger agreement if ironSource is then in breach of any of its representations, warranties, covenants or agreements contained in the merger agreement, which breach would give rise to the failure of certain closing conditions set forth in the merger agreement; or |
○ | if (i) prior to obtaining approval of the Unity issuance proposal, the Unity board effects a Unity Change of Recommendation, or (ii) Unity has materially breached the section of the merger agreement describe under “The Merger Agreement—No Solicitation; Changes of Recommendation—No Solicitation by Unity”; or |
○ | prior to obtaining approval of the ironSource merger proposal, effect an ironSource Change of Recommendation and substantially concurrently enter into a definitive agreement providing for a ironSource Superior Proposal; provided that (x) ironSource has complied in all material respects with the terms of the section of the merger agreement described under “The Merger Agreement—No Solicitation; Changes of Recommendation—No Solicitation by ironSource” and (y) substantially concurrently with or prior to (and as a condition to) the termination of the merger agreement, ironSource pays to Unity the ironSource Termination Fee described below under “The Merger Agreement—Termination—Termination Fees”; or |
• | By Unity: |
○ | in the event that (A) ironSource breaches, fails to perform or violates its covenants or agreements under the merger agreement or (B) any of the representations and warranties of ironSource set |
○ | if (i) prior to obtaining approval of the ironSource merger proposal, the ironSource board effects an ironSource Change of Recommendation, or (ii) ironSource has materially breached the section of the merger agreement describe under “The Merger Agreement—No Solicitation; Changes of Recommendation—No Solicitation by ironSource”; or |
○ | prior to obtaining approval of the Unity issuance proposal, effect a Unity Change of Recommendation and substantially concurrently enter into a definitive agreement providing for a Unity Superior Proposal; provided that (x) Unity has complied in all material respects with the terms of the section of the merger agreement describe under “The Merger Agreement—No Solicitation; Changes of Recommendation—No Solicitation by Unity” and (y) substantially concurrently with or prior to (and as a condition to) the termination of the merger agreement, Unity pays to ironSource the Unity Termination Fee described below under “The Merger Agreement t—Termination Fees”. |
Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data (In thousands, except per share amounts) | | | Three months ended March 31, 2022 | | | Year ended December 31, 2021 |
Revenue | | | 509,860 | | | 1,660,432 |
Net loss | | | (186,118) | | | (673,574) |
Net loss per share attributable to common stockholders: | | | | | ||
Basic | | | (0.46) | | | (1.71) |
Diluted | | | (0.46) | | | (1.71) |
Selected Unaudited Pro Forma Condensed Combined Balance Sheet Data (in thousands) | | | As of March 31, 2022 | | | |
Total assets | | | 9,638,648 | | | |
Total liabilities | | | 3,199,171 | | | |
Total stockholder’s equity | | | 6,439,477 | | |
| | Unity | | | ironSource | |||||||
| | Historical | | | Pro Forma Combined | | | Historical | | | Pro Forma Equivalent(1) | |
Net Income (loss) per share | | | | | | | | | ||||
Basic | | | | | | | | | ||||
Three months ended March 31, 2022 | | | (0.60) | | | (0.46) | | | 0.01 | | | (0.05) |
The year ended December 31, 2021 | | | (1.89) | | | (1.71) | | | 0.07 | | | (0.18) |
Diluted | | | | | | | | | ||||
Three months ended March 31, 2022 | | | (0.60) | | | (0.46) | | | 0.01 | | | (0.05) |
The year ended December 31, 2021 | | | (1.89) | | | (1.71) | | | 0.06 | | | (0.18) |
Book Value per Share | | | | | | | | | ||||
As of March 31, 2022 | | | 8.03 | | | 15.87 | | | 1.12 | | | 1.73 |
(1) | The pro forma equivalent per share information of ironSource is calculated by multiplying the pro forma combined per share information of Unity by the exchange ratio of 0.1089. |
| | Unity Common Stock | | | ironSource Class A Ordinary Shares | | | ironSource Pro Forma Equivalent | |
July 12, 2022 | | | $39.76 | | | $2.23 | | | $4.33 |
July 25, 2022 | | | $35.54 | | | $3.67 | | | $3.87 |
• | Unity and ironSource may experience negative reactions from the financial markets, including negative impacts on the market price of Unity common stock and ironSource ordinary shares; |
• | the manner in which industry contacts, business partners and other third parties perceive Unity and ironSource may be negatively impacted, which in turn could affect Unity’s and ironSource’s marketing operations or their ability to compete for new business or obtain renewals in the marketplace more broadly; |
• | Unity and ironSource will be required to pay their respective costs relating to the merger, such as financial advisory, legal, accounting costs and associated fees and expenses, whether or not the merger is completed; |
• | there may be disruptions to each company’s respective business resulting from the announcement and pendency of the merger, and any adverse changes in their relationships with their respective customers, partners, suppliers, other business partners and employees may continue or intensify; and |
• | Unity and ironSource will have expended time and resources that could otherwise have been spent on Unity’s and ironSource’s existing businesses and the pursuit of other opportunities that could have been beneficial to each company. |
• | delay, defer, or cease purchasing products or services from, providing products or services to, Unity, ironSource or the combined company; |
• | delay or defer other decisions concerning Unity, ironSource or the combined company, including entering into contracts with Unity or ironSource or making other decisions concerning Unity or ironSource or seek to change or cancel existing business relationships with Unity or ironSource; or |
• | otherwise seek to change the terms on which they do business with Unity, ironSource or the combined company. |
• | the inability to successfully integrate ironSource into Unity in a manner that permits Unity to achieve the full revenue growth or cost savings anticipated from the merger; |
• | complexities associated with managing the larger, more complex, integrated business; |
• | not realizing anticipated operating synergies; |
• | integrating personnel from the two companies and the loss of key employees; |
• | potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with the merger; |
• | integrating relationships with industry contacts and business partners; |
• | performance shortfalls at one or both of the companies as a result of the diversion of management’s attention caused by completing the merger and integrating ironSource’s operations into Unity; and |
• | the disruption of, or the loss of momentum in, each company’s ongoing business or inconsistencies in standards, controls, procedures and policies. |
• | the risk that the merger agreement may be terminated in accordance with its terms and that the merger may not be completed; |
• | the possibility that Unity stockholders may not approve the Unity issuance proposal; |
• | the possibility that ironSource shareholders may not approve the ironSource merger proposal; |
• | the risk that Unity or ironSource may be unable to obtain governmental and regulatory approvals required for the merger, or required governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could cause the parties to abandon the merger; |
• | the risk that the parties may not be able to satisfy the conditions to the completion of the merger in a timely manner or at all; |
• | the possibility that Unity and ironSource will incur significant transaction and other costs in connection with the merger, which may be in excess of those anticipated by Unity or ironSource; |
• | the risk that the combined company may be unable to achieve operational or corporate synergies or that it may take longer than expected to achieve those synergies; |
• | the risk that the merger may not qualify as a “reorganization” under the meaning of Section 368(a)(1)(B) of the Code and/or Section 368(a)(2)(E) of the Code, potentially causing ironSource shareholders to recognize gain or loss for U.S. federal income tax purposes; |
• | the risk that Unity may fail to realize other benefits expected from the merger; |
• | the outcome of any litigation relating to the merger; |
• | the risk that the combined company may fail to attract, motivate and retain executives and other key employees following the completion of the merger; |
• | the risk that any announcements relating to, or the completion of, the merger could have adverse effects on the market price of Unity common stock; |
• | the risk related to disruption of management time from ongoing business operations due to the merger; |
• | the risk that the merger and its announcement and/or completion could have an adverse effect on the ability of Unity, ironSource and/or the combined company to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers; |
• | the risk that the businesses will not be integrated successfully; and |
• | the risks to their operating results and businesses generally. |
• | the Unity issuance proposal; and |
• | the Unity adjournment proposal. |
• | “FOR” the Unity issuance proposal; and |
• | “FOR” the Unity adjournment proposal. |
• | To vote using the proxy card that may have been delivered to you, simply complete, sign and date the proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the Unity special meeting, we will vote your shares as you direct. |
• | To vote over the telephone, dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the control number from the Notice. Your vote must be received by 11:59 p.m. Eastern Time on , 2022 to be counted. |
• | To vote through the internet in advance of the meeting, go to www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the control number from your Notice. Your vote must be received by 11:59 p.m. Eastern Time on , 2022 to be counted. |
• | notifying Unity’s corporate secretary, in writing, at Unity Software Inc., Attn: Corporate Secretary at 30 3rd Street, San Francisco, CA 94103. Such notice must be received at the above location before p.m., Pacific Time, on , 2022; |
• | voting again using the telephone or Internet before p.m., Pacific Time, on , 2022 (your latest telephone or Internet proxy is the one that will be counted); or |
• | attending and voting during the Unity special meeting. Simply logging into the Unity special meeting will not, by itself, revoke your proxy. |
• | determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, and in the best interests of, ironSource and its shareholders and that, considering the financial position of the merging companies, no reasonable concern exists that the surviving company will be unable to fulfill the obligations of ironSource to its creditors; |
• | approved the merger agreement, the merger, the merger consideration and the other transactions and arrangements contemplated under the merger agreement; and |
• | determined to recommend that ironSource’s shareholders vote in favor the merger agreement, the merger, the merger consideration, and the other transactions and arrangements contemplated under the merger agreement. |
• | you can send a written notice stating that you would like to revoke your proxy, which notice must be received in our offices at least six hours prior to the time set for beginning the ironSource special general meeting (i.e., by (Israel time), on , 2022); |
• | you can complete and submit a new proxy card dated later than the first proxy card, which must be received no later than the deadline applicable to a notice of revocation, as described above; or |
• | you can attend the ironSource special general meeting, and file a written notice of revocation or make an oral notice of revocation of your proxy with the chairperson of the special general meeting and then vote in person. Your attendance at the special general meeting will not revoke your proxy in and of itself. |
(1) | the ironSource Class A ordinary shares, voting as a separate class; |
(2) | the ironSource Class B ordinary shares, voting as a separate class, and |
(3) | the ironSource Class A ordinary shares and ironSource Class B ordinary shares, voting together as a single class. |
• | the majority voted in favor of the ironSource merger proposal, which includes a majority of the shares held by shareholders who are not deemed to have a personal interest (as defined under the Companies Law) in the approval of the proposal that are voted at the applicable ironSource meeting, excluding abstentions and broker non-votes; or |
• | the total number of shares held by non-conflicted shareholders (as described in the previous bullet-point) voted against the ironSource merger proposal does not exceed 2% of the aggregate voting power in ironSource (on a per class or combined class basis). |
(i) | in favor of: |
(A) | the consummation of the transactions contemplated by the merger agreement, including the merger, |
(B) | all of the matters, actions and proposals necessary to consummate the transactions contemplated by the merger agreement, and |
(C) | any other transaction contemplated by the merger agreement or other matters that would reasonably be expected to facilitate the merger, including any proposal to adjourn or postpone any meeting of the ironSource shareholders to a later date if there are not sufficient votes to approve the adoption of the merger agreement; and |
(ii) | against: |
(A) | certain alternative business combination transactions described in the merger agreement; |
(B) | any action, proposal or transaction that would reasonably be expected to result in a breach of any covenant, agreement, representation or warranty or any other obligation of ironSource as set forth in the merger agreement or of any ironSource shareholder as set forth in its ironSource Voting Agreements; or |
(C) | any other action, proposal or transaction that is intended, or would reasonably be expected, to materially impede, interfere with, be inconsistent with, delay, postpone or prevent the consummation of, or otherwise adversely affect, the merger, the other transactions contemplated by the ironSource Voting Agreements or the merger agreement. |
(i) | in favor of: |
(A) | the consummation of the transactions contemplated by the merger agreement, including the merger, |
(B) | all of the matters, actions and proposals necessary to consummate the transactions contemplated by the merger agreement, |
(C) | any other transaction contemplated by the merger agreement, and |
(D) | any proposal to adjourn or postpone any meeting of the Unity stockholders to a later date if there are not sufficient votes to approve the adoption of the merger agreement; and |
(ii) | against: |
(A) | certain alternative business combination transactions described in the merger agreement; |
(B) | any action, proposal or transaction that would reasonably be expected to result in a breach of any covenant, agreement, representation or warranty or any other obligation of Unity as set forth in the merger agreement or of any such Unity stockholder as set forth in the Unity Voting Agreement; or |
(C) | any other action, proposal or transaction that is intended, or would reasonably be expected, to materially impede, interfere with, be inconsistent with, delay, postpone or prevent the consummation of, or otherwise adversely affect, the merger, the other transactions contemplated by the Unity Voting Agreement or the merger agreement. |
• | The ability of ironSource’s business to accelerate the integration of Unity’s two solutions—Create Solutions and Operate Solutions—creating a more comprehensive offering in an end-to-end platform will better support customers’ success by allowing them to more easily create, run, publish, grow, and monetize live games and RT3D content. |
• | That this integration will also create a platform which uniquely transforms the creation and growth process from a siloed, linear process, to a deeply connected one, powering more customer and creator success by driving improvements in both content and growth. |
• | That ironSource’s complementary products - including on-device app discovery through Aura and cross-channel user acquisition and creative optimization through Luna - will provide customers with expanded growth capabilities, at an earlier stage in their lifecycle. |
• | That the addition of ironSource’s SuperSonic publishing solution to Unity’s Create business’ existing offerings will bring best-in-class games publishing products to creators. |
• | That ironSource’s leading mediation platform (“LevelPlay”), when combined with Unity’s own mediation efforts, will better connect Unity’s Create and Operate businesses, creating an integrated system that further supports creators’ success. |
• | The highly complementary platforms and capabilities of the businesses of Unity and ironSource and the expectation that Unity and ironSource combined will be able to create the necessary scale to deliver more innovative and diversified solutions to customers. |
• | That the combination of Unity’s and ironSource’s networks, together with ironSource’s leading mediation product LevelPlay, will deliver increased user reach and data scale, providing improved monetization capabilities to publishers, and potential increased return on ad spend to advertisers. |
• | The financial attractiveness of the ironSource business. |
• | The expectation, based on estimates provided by members of Unity’s management team prior to the execution of the merger agreement, that Unity and ironSource combined are expected to be able to achieve an annual adjusted EBITDA run-rate of $1 billion by the end of 2024 and more than $300 million annual EBITDA synergies within three years of the closing of the merger. |
• | The synergies Unity expects to be able to obtain as a result of the merger due to what the Unity board believes are supported by the high quality of ironSource’s assets, substantial revenue synergies, and data scale. |
• | The Unity board’s knowledge of, and discussions with Unity’s management and advisors regarding, Unity’s and ironSource’s respective business operations, financial condition, earnings and prospects, taking into account ironSource’s publicly-filed information and the results of Unity’s due diligence review of ironSource. |
• | That the companies’ familiarity with each other’s assets, and their similar cultures, is expected to facilitate a successful integration of the companies post-closing. |
• | The breadth and depth of experience and talent of the ironSource team, and their strong track record of excellence, based on assessments by members of Unity’s management team prior to the execution of the merger agreement. |
• | The recommendation of the merger by Unity’s executive management team. |
• | The oral opinion of Morgan Stanley, subsequently confirmed in writing, rendered to the Unity board that, as of July 12, 2022, and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of the review undertaken by Morgan Stanley as set forth in the written opinion, the exchange ratio pursuant to the merger agreement was fair from a financial point of view to Unity. Such opinion is more fully described below under “—Opinion of Unity’s Financial Adviser”. |
• | The endorsement and support of the merger from Silver Lake and Sequoia, the two largest Unity stockholders, and their commitment to invest an aggregate $1 billion in a private investment in public equity (the “PIPE”) in Unity in the form of convertible notes to be issued at the closing of the merger (see “—Interests of Unity’s Directors and Executive Officers in the Merger—PIPE” for more information). |
• | The review, approval and recommendation of the PIPE by a committee of the Unity board consisting solely of directors disinterested in the PIPE transaction (see “The Merger—Background of the Merger” for more information). |
• | The Unity board’s view that the proceeds of the PIPE, together with cash on hand, would provide Unity with ample capital to engage in a stock buyback following the closing of the merger and depending on the specific facts and circumstances related to the combined company following the closing of the merger, which was viewed by the Unity board as accretive. |
• | The commitments made by certain Unity stockholders, including Silver Lake, Sequoia and Unity’s Chief Executive Officer, under the Unity Stockholder Voting Agreement to vote for and otherwise support the Unity issuance proposal and the other transactions contemplated by the merger agreement. |
• | That the Unity board believes the restrictions imposed on Unity’s business and operations during the pendency of the merger are reasonable and not unduly burdensome. |
• | That the exchange ratio is fixed and will not fluctuate in the event that the market price of ironSource ordinary shares increases relative to the market price of Unity common stock between the date of the merger agreement and the completion of the merger. |
• | The likelihood of consummation of the merger and the Unity board’s evaluation of the likely time period necessary to close the merger. |
• | That the Unity stockholders will have the opportunity to vote on the Unity issuance proposal, which is a condition precedent to the merger. |
• | The representations, warranties, covenants and conditions contained in the merger agreement, including the following (which are not necessarily presented in order of relative importance): |
○ | That there are limited circumstances in which the ironSource board may terminate the merger agreement or change its recommendation that ironSource shareholders approve the ironSource merger proposal, and if the merger agreement is terminated by Unity as a result of a change in recommendation of the ironSource board or by ironSource in order to enter into a definitive agreement with a third party providing for the consummation of an ironSource superior proposal, then in each case ironSource has agreed to pay Unity a termination fee of $150.0 million or approximately 3.4% of the transaction value. For additional information, see the section titled “The Merger Agreement—Termination” beginning on page 156. |
○ | That if the merger agreement is terminated by either party because ironSource shareholders have not approved the ironSource merger proposal, then ironSource has agreed to pay Unity an expense reimbursement fee not to exceed $20.0 million. For additional information, see the section titled “The Merger Agreement—Termination” beginning on page 156. |
○ | That Unity has the ability, in specified circumstances, to provide information to and to engage in discussions or negotiations with a third party that makes an unsolicited acquisition proposal, as further described in the section titled “The Merger Agreement—No Solicitation; Changes of Recommendation—Unity: Exceptions to No Solicitation by Unity” beginning on page 145. |
○ | That the Unity board has the ability, in specified circumstances, to change its recommendation to Unity stockholders to vote in favor of the Unity issuance proposal or to terminate the merger agreement in order to enter into a definitive agreement with a third party providing for the consummation of a Unity superior proposal, subject to the obligation to pay ironSource a termination fee of $150.0 million, as further described in the sections titled “The Merger Agreement—No Solicitation; Changes of Recommendation—Exceptions to No Solicitation” beginning on page 146 and “The Merger Agreement—Termination—Termination Fees” beginning on page 145. |
• | That the merger may not be completed in a timely manner or at all and the potential consequences of non-completion or delays in completion. |
• | The effect that the length of time from announcement of the merger until completion of the merger could have on the market price of Unity common stock, Unity’s operating results and Unity’s relationship with Unity’s employees, stockholders, customers, suppliers, regulators and others who do business with Unity. |
• | That the integration of ironSource and Unity may not be as successful as expected and that the anticipated benefits of the merger may not be realized in full or in part, including the risk that synergies and cost-savings may not be achieved or not achieved in the expected time frame. |
• | That the attention of Unity’s senior management may be diverted from other strategic priorities to implement the merger and make arrangements for the integration of ironSource’s and Unity’s operations, assets and employees following the merger. |
• | The adverse impact that business uncertainty pending completion of the merger could have on Unity’s and ironSource’s respective ability to attract, retain and motivate key personnel. |
• | The challenges of retaining ironSource employees following completion of the merger in light of the differences between the employee compensation practices and employee leveling and title practices at ironSource and Unity, respectively. |
• | The composition of the board of directors and management of the combined company and the potential for disagreement among directors and executive officers selected from two different organizations. |
• | That ironSource shareholders may not approve the ironSource merger proposal or that Unity stockholders may not approve the Unity issuance proposal. |
• | The risk that antitrust regulatory authorities may not approve the merger or may impose terms and conditions on their approvals that adversely affect the business and financial results of Unity following the merger. |
• | That the exchange ratio is fixed and will not fluctuate in the event that the market price of Unity common stock decreases relative to the market price of ironSource ordinary shares between the date of the merger agreement and the completion of the merger. |
• | That the merger agreement imposes restrictions on Unity’s ability to solicit alternative transactions and make certain acquisitions, which are described in the sections titled “The Merger Agreement—Interim Operations of ironSource and Unity Pending the Merger” and “The Merger Agreement—No Solicitation; Changes of Recommendation” beginning on pages 136 and 142, respectively. |
• | That the restrictions in the merger agreement on the conduct of Unity’s business during the period between execution of the merger agreement and the consummation of the merger, including that Unity is required to conduct its business in the ordinary course in all material respects, subject to specific limitations, which could delay or prevent Unity from pursuing certain business opportunities or strategic transactions that may arise and could have a negative impact on Unity’s ability to maintain its existing business and employee relationships. |
• | That there are limited circumstances in which the Unity board may terminate the merger agreement or change its recommendation that Unity stockholders approve the Unity issuance proposal, and if the merger agreement is terminated by ironSource as a result of a change in recommendation of the Unity board or by the Unity board in order to enter into a definitive agreement with a third party providing for the consummation of a Unity superior proposal, Unity has agreed to pay ironSource a termination fee of $150.0 million. For additional information, see the section titled “The Merger Agreement—Termination” beginning on page 156. |
• | That if the merger agreement is terminated by either party because Unity stockholders have not approved the Unity issuance proposal, Unity has agreed to pay ironSource an expense reimbursement fee of up to $20 million. For additional information, see the section titled “The Merger Agreement—Termination” beginning on page 156. |
• | The requirement that Unity must hold a stockholder vote on the approval of the Unity issuance proposal, even if the Unity board has withdrawn or changed its recommendation in favor of the Unity issuance proposal, and the inability of Unity to terminate the merger agreement in connection with an acquisition proposal (except in the limited circumstance when it qualifies as a Unity superior proposal). For additional information, see the section titled “The Merger Agreement—No Solicitation; Changes of Recommendation” beginning on page 142. |
• | The ability of the ironSource board, in certain circumstances, to terminate the merger agreement or change its recommendation that ironSource’s shareholders approve the ironSource merger proposal. |
• | The transaction costs to be incurred by Unity in connection with the merger and the dilution to be experienced by Unity stockholders as a result of the issuance of Unity shares in the merger. |
• | The likelihood of lawsuits being brought against Unity, ironSource or their respective boards in connection with the merger. |
• | The risks associated with the occurrence of events that may materially and adversely affect the financial condition, properties, assets, liabilities, business or results of operations of ironSource and its subsidiaries but that will not entitle Unity to terminate the merger agreement. |
• | The potential impact on the market price of Unity common stock as a result of the issuance of the merger consideration to ironSource shareholders. |
• | Various other risks described in the section titled “Risk Factors” beginning on page 41. |
• | The belief of the ironSource board that the company resulting from a merger of Unity and ironSource would be well positioned to achieve future growth and generate additional returns for ironSource’s shareholders, including due to the synergies ironSource expects the combined company to be able to obtain as a result of |
• | When evaluating the benefits of the combined company, the ironSource board considered many of the following, which favored the determinations and recommendations of the ironSource board, in particular the fact that the combined company is expected to (not in any relative order of importance): |
○ | be able to combine complementary products to create a unique, end-to-end platform that allows creators to create, publish, run, monetize and grow live games and RT3D content seamlessly; |
○ | be able to better integrate those products into a differentiated platform offering that transforms and streamlines how live games, RT3D apps and services are made and scaled, by turning the current linear creation and growth process into a deeply connected, data-driven, and interactive one; |
○ | be able to better connect Unity’s Create and Operate offerings-specifically by leveraging ironSource’s Supersonic publishing solution and LevelPlay mediation product-to unlock growth opportunities for creators; |
○ | be able to leverage a differentiated platform offering in a competitive marketplace; |
○ | drive better results and performance for customers through increased user reach, and greater scale and diversity of data, including increased revenue for app developers and better return on ad spend for advertisers; |
○ | increase the number of successful creators, by offering critical tools like marketability testing, and cross-channel app marketing and monetization to developers at an earlier stage in their lifecycle; |
○ | increase the number of successful games by integrating ironSource’s Supersonic publishing solution more deeply into the game creation stage, thereby increasing access to best-in-class publishing products for long-tail developers and helping them to launch and scale successful games; |
○ | be able to continue investing heavily in R&D and product development to continue developing compelling and differentiated products; and |
○ | drive continued innovation within the game industry and in verticals outside of gaming by leveraging a shared culture of developing technologies designed to democratize the creation and growth of RT3D app and game-based businesses. |
• | Current and historical market prices for ironSource shares and the fact that the merger consideration represents a premium compared with the exchange ratio of ironSource shares to Unity shares. |
• | ironSource’s competitive position, strategic options and prospects, as well as the financial plan and prospects if ironSource were to remain an independent public company, and the potential impact of those factors on the trading price of ironSource Class A ordinary shares. |
• | The expectation that the industries in which ironSource operates will undergo consolidation in the coming years and that ironSource should ideally be in a position to make strategic decisions based on all available options and have the ability to lead the market going forward. |
• | The belief that considering all other options, Unity is compelling potential partner in terms of synergies, culture and business fit. |
• | The significant elements of ironSource’s business and operating strategy that will benefit from the combination with Unity, including the fact that based on estimates prepared by each of the respective management teams prior to the execution of the merger agreement, that Unity and ironSource combined are expected to be able to achieve annual Adjusted EBITDA run-rate of $1 billion by the end of 2024 and more than $300 million annual EBITDA synergies within three years of the closing of the merger. |
• | The synergies that the combined company expects to be able to obtain as a result of the merger due to what the ironSource board believes are the high quality of Unity’s assets, including substantial revenue synergies and data scale. |
• | Based on a $4.4 billion valuation of ironSource in the merger, the merger consideration represented a premium of 74% to the 30 day average exchange ratio as of July 13, 2022, the date of the public announcement of the merger agreement. |
• | Following the merger, ironSource shareholders will also have the opportunity as stockholders of Unity to participate in the value of the combined company, including the expected future growth and expected synergies, which the ironSource board viewed as an important opportunity for ironSource shareholders from the perspective of maximizing long-term returns, rather than being cashed out from their investment in ironSource, had the merger consideration consisted of cash. |
• | The expectation that the merger of the respective businesses of the two companies will transform the combined company into a highly profitable and free cash flow positive company as a result of synergies between the companies. |
• | The ironSource board’s belief that the merger consideration represents the highest consideration that Unity was willing to pay and the highest per share value reasonably obtainable for ironSource’s shareholders, in each case, as of the date of the merger agreement, with the ironSource board basing this belief on ironSource’s negotiations with Unity and a number of factors, including the fact that the exchange ratio represented a premium of 74% to the 30 day average exchange ratio as of July 13, 2022, and the fact that Unity would be required to obtain stockholder approval for the deal, due to Unity’s inability to issue more than 20% of its outstanding common stock without such approval. |
• | The intention of ironSource that the merger will be tax free to Israeli shareholders pursuant to the 103K Ruling and the provisions included in the merger agreement in order to obtain such ruling. |
• | The intention of ironSource and Unity that the merger qualify as a “reorganization” under Section 368(a)(1)(B) of the Code and/or Section 368(a)(2)(E) of the Code. |
• | The ironSource board considered the financial analyses reviewed and discussed with the ironSource board by representatives of Jefferies, ironSource’s financial adviser, as well as the opinion dated July 11, 2022, of Jefferies to the ironSource board as to the fairness, from a financial point of view and as of such date, to the holders of ironSource ordinary shares of the exchange ratio provided for in the merger pursuant to the merger agreement, which opinion was based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken as further described under the heading “—Opinion of ironSource’s Financial Adviser”. |
• | The ironSource board considered the nature of the closing conditions included in the merger agreement, including the absence of any financing conditions or related contingencies with respect to the merger consideration, as well as the anticipation that regulatory approvals, including with HSR Act clearance, are likely to be obtained, based on the analysis performed in this respect. |
• | The ironSource board considered the identity of Unity, which is a reputable company with a strong business model. |
• | The ironSource board considered the terms of the merger agreement, including the parties’ respective representations, warranties and covenants, the conditions to their respective obligations to complete the merger and the ability of the respective parties to terminate the merger agreement. The ironSource board noted that the termination or “breakup” fee provisions of the merger agreement could have the effect of discouraging competing proposals for a business combination between ironSource and a third party, but that such provisions are customary for transactions of this size and type. The ironSource board considered that the amount of the termination fee, which amount is equal to $150.0 million, or approximately 3.4% of the transaction value, was within a reasonable range. |
• | The ironSource board considered that the merger agreement permits ironSource and the ironSource board to respond to a competing proposal that the ironSource board determines is a superior proposal, subject to certain restrictions imposed by the merger agreement and the requirement that ironSource pay the termination fee in the event that ironSource terminates the merger agreement to accept a superior proposal, and also permits the ironSource board to change its recommendation in favor of the merger in response to certain unforeseen or unforeseeable intervening events. |
• | The ironSource board’s belief, based in part on advice from its legal and financial advisers, that such termination fee is reasonable, customary and would not deter any interested third party from making, or inhibit the ironSource board from approving, an acquisition proposal that would constitute a superior proposal if such proposal were available and made in accordance with the terms and conditions of the merger agreement. |
• | The ability of the ironSource board, under certain circumstances, to withhold or withdraw its recommendation that ironSource’s shareholders vote to approve the merger. |
• | The process run by the Company to consider, identify and evaluate other potential merger partners and/or transactions. |
• | The ironSource board considered that the merger had been approved by the audit committee of ironSource’s board (in light of certain personal interests of certain executive officers and directors of ironSource in the approval of the merger), prior to being considered by the ironSource board. |
• | The ironSource board considered that the transaction will result in detailed public disclosure and a substantial period of time prior to the convening of the shareholder meeting to consider the approval and adoption of the ironSource merger proposal during which a competing proposal could be brought forth. |
• | The ironSource board also considered that the affirmative vote of a majority of the voting power represented at the special general meetings in person or by proxy and voting thereon (excluding abstentions and broker non-votes) of each of (x) the ironSource Class A ordinary shares, voting as a separate class, (y) the ironSource Class B ordinary shares, voting as a separate class, and (z) the ironSource Class A ordinary shares and ironSource Class B ordinary shares, voting together as a single class, is necessary for the approval of the merger. |
• | The ironSource board considered that ironSource had not received any written proposals from any other potentially interested parties as of the date of the merger agreement. |
• | The ironSource board considered that the merger agreement terms enable ironSource operations to continue to be headquartered in Israel, thereby ensuring that ironSource’s employees will be able to continue to work and contribute to the growth of the combined company from their current location. |
• | The ironSource board also identified and considered a number of other matters, some of which are countervailing factors and risks to ironSource and its shareholders, relating to the merger and the merger agreement, including the following: |
○ | the possibility that the merger may not be completed and the potential adverse consequences to ironSource if the merger is not completed, including the potential (i) loss of customers, suppliers and employees; (ii) reduction in the perceived value of ironSource; and (iii) erosion of customer and employee confidence in ironSource; |
○ | the limitations imposed in the merger agreement on the conduct of ironSource’s business during the pre-closing period, its ability to solicit and respond to competing proposals and the ability of the ironSource board to change or withdraw its recommendation of the merger; |
○ | the possibilities that certain provisions of the merger agreement, including the non-solicitation and other protective provisions such as the $150.0 million termination fee payable if the merger agreement is terminated under certain circumstances, might have the effect of deterring other potential acquirers from making competing proposals that could be more advantageous to ironSource’s shareholders; |
○ | the fact that historically Unity has not been a profitable company, that its performance in 2022 has been affected by various factors that led to changes in guidance, and the risk that despite the parties views on the prospects of the combined company, it will not be profitable as expected or at all; |
○ | the additional interests of certain members of ironSource board, as of the time of approval of the merger (namely, Tomer Bar-Zeev, Arnon Harish and Eyal Milrad) who serve as executive officers and directors of ironSource, as well as certain other employees who are also shareholders of ironSource, who disclosed their potential personal interest in the merger (in their capacity as employees of ironSource), and advised that they are expected to enter into new employment terms |
○ | the risk that the parties may incur significant costs and delays related to the merger, including resulting from seeking governmental consents and regulatory approvals necessary for completion of the merger; and |
○ | the risks of the type and nature described under “Risk Factors” and the matters described under “Cautionary Statement Regarding Forward-Looking Statements.” |
• | reviewed certain publicly available financial statements and other business and financial information of ironSource and Unity, respectively; |
• | reviewed certain internal financial statements and other financial and operating data concerning ironSource and Unity, respectively; |
• | reviewed certain financial projections of ironSource prepared by the management of ironSource; |
• | reviewed certain financial projections of Unity prepared by the management of Unity; |
• | reviewed information relating to certain strategic, financial and operational benefits anticipated from the merger, prepared by the management of Unity; |
• | discussed the past and current operations and financial condition and the prospects of Unity, including information relating to certain strategic, financial and operational benefits anticipated from the merger, with senior executives of Unity; |
• | discussed the past and current operations and financial condition and the prospects of ironSource, including information relating to certain strategic, financial and operational benefits anticipated from the merger, with senior executives of ironSource; |
• | reviewed the pro forma impact of the merger on Unity’s cash flow, consolidated capitalization and certain financial ratios; |
• | reviewed the reported prices and trading activity for ironSource Class A ordinary shares and Unity common stock; |
• | compared the financial performance of ironSource and Unity and the prices and trading activity of ironSource Class A ordinary shares and Unity common stock with that of certain other publicly traded companies comparable with ironSource and Unity, respectively, and their securities; |
• | participated in certain discussions and negotiations among representatives of ironSource and Unity and their financial and legal advisors; |
• | reviewed the merger agreement and certain related documents; and |
• | performed such other analyses, reviewed such other information and considered such other factors as Morgan Stanley deemed appropriate. |
• | Atlassian Corporation Plc; |
• | Avalara, Inc.; |
• | CrowdStrike Holdings, Inc.; |
• | Datadog, Inc.; |
• | Elastic N.V.; |
• | Matterport, Inc.; |
• | Okta, Inc.; |
• | UiPath Inc.; |
• | Veeva Systems Inc.; |
• | Wix.com Ltd.; |
• | ZoomInfo Technologies Inc.; and |
• | Zscaler, Inc.; |
• | AppLovin Corporation; |
• | Digital Turbine, Inc.; |
• | The Trade Desk, Inc.; and |
• | ironSource Ltd. |
• | AppLovin Corporation; |
• | Digital Turbine, Inc.; |
• | The Trade Desk, Inc.; and |
• | Unity Software, Inc. |
Public Trading Multiples | | | Implied Transaction Exchange Ratio Range |
CY2022E AV/REVENUE | | | |
Unity street case to ironSource street case | | | 0.055x – 0.134x |
CY2023E AV/REVENUE | | | |
Unity street case to ironSource street case | | | 0.046x – 0.142x |
CY2022E AV/REVENUE (Unity) – AV/EBITDA (ironSource) | | | |
Unity street case to ironSource street case | | | 0.054x – 0.112x |
CY2023E AV/REVENUE (Unity) – AV/EBITDA (ironSource) | | | |
Unity street case to ironSource street case | | | 0.049x – 0.122x |
Unity management case to ironSource management case | | | Implied Transaction Exchange Ratio Range |
CY 2024E AV/Revenue (Unity) – AV/EBITDA (ironSource) | | | 0.057x – 0.142x |
CY 2025E AV/Revenue (Unity) – AV/EBITDA (ironSource) | | | 0.061x – 0.151x |
Relative Discounted Cash Flow | | | Implied Transaction Exchange Ratio Range |
As of June 30, 2022 | | | 0.079x – 0.152x |
ironSource Management / Unity Management Cases (2023E – 2025E) | | | Implied Transaction Exchange Ratio Range |
Revenue | | | 0.163x – 0.182x |
Gross Profit | | | 0.189x – 0.210x |
EBITDA | | | 0.286x – 1.658x |
12 Month Research Estimates | | | Implied Transaction Exchange Ratio Range |
As of July 11, 2022 | | | 0.071x – 0.139x |
| | Implied Transaction Exchange Ratio Range | |
Premium to July 11, 2022 Trading Price (25th – 75th percentile) | | | 0.063x – 0.078x |
Premium to one-month average exchange ratio preceding announcement (25th – 75th percentile) | | | 0.062x – 0.076x |
Trading Periods | | | Range of Trading Prices of ironSource Class A Ordinary Shares | | | Range of Trading Prices per Share of Unity Common Stock |
Prior 10 Days | | | $2.30 – $2.59 | | | $36.82 – $45.23 |
Prior 30 Days | | | $2.25 – $2.95 | | | $32.85 – $46.81 |
Prior 60 Days | | | $2.25 – $4.74 | | | $30.30 – $94.03 |
• | reviewed a draft dated July 8, 2022 of the merger agreement; |
• | reviewed certain publicly available financial and other information about ironSource and Unity; |
• | reviewed certain information furnished to Jefferies and approved for Jefferies’ use by ironSource management and the ironSource board, including financial forecasts and analyses, relating to the business, operations and prospects of ironSource prepared by ironSource management (the “ironSource Forecasts”); |
• | reviewed certain information furnished to Jefferies and approved for Jefferies’ use by ironSource management and the ironSource board, including financial forecasts and analyses, relating to the business, operations and prospects of Unity prepared by Unity management (the “Unity Forecasts”); |
• | held discussions with members of senior management of ironSource concerning the matters described in the second through fourth clauses above; |
• | reviewed the share trading price history and valuation multiples for the ironSource ordinary shares and the Unity common stock and compared them with those of certain publicly traded companies that Jefferies deemed relevant; |
• | considered certain potential pro forma financial effects of the merger on ironSource and Unity utilizing the financial forecasts and estimates relating to ironSource and Unity referred to above; and |
• | conducted such other financial studies, analyses and investigations as Jefferies deemed appropriate. |
• | AdTheorent Holding Company, Inc. |
• | AppLovin Corporation |
• | Criteo S.A. |
• | Digital Turbine, Inc. |
• | Doubleverify Holdings, Inc. |
• | Integral Ad Science Holding Corp. |
• | Magnite, Inc. |
• | Outbrain, Inc. |
• | Perion Network Ltd. |
• | PubMatic, Inc. |
• | Taboola.com Ltd. |
• | Tremor International Ltd |
• | Viant Technology Inc. |
Financial Metric | | | 25th Percentile | | | Median | | | 75th Percentile |
2022E Revenue | | | 1.3x | | | 2.1x | | | 4.5x |
2023E Revenue | | | 1.1x | | | 1.9x | | | 3.5x |
2022E EBITDA | | | 5x | | | 8x | | | 12x |
2023E EBITDA | | | 4x | | | 6x | | | 8x |
Financial Metric | | | Selected Multiple Range | | | Implied Equity Value Per Share |
2022E Revenue | | | 3.0x – 4.0x | | | $2.51 – $3.20 |
2023E Revenue | | | 2.5x – 3.5x | | | $2.57 – $3.42 |
2022E EBITDA | | | 9.0x – 13.0x | | | $2.33 – $3.17 |
2023E EBITDA | | | 7.0x – 10.0x | | | $2.35 – $3.16 |
• | Adobe, Inc. |
• | ANSYS, Inc. |
• | AppLovin Corporation |
• | Aspen Technology, Inc. |
• | Autodesk, Inc. |
• | Cadence Design Systems, Inc. |
• | Dassault Systemes SE |
• | Digital Turbine, Inc. |
• | PTC, Inc. |
• | Roblox Corporation |
Financial Metric | | | 25th Percentile | | | Median | | | 75th Percentile |
2022E Revenue | | | 7.3x | | | 9.2x | | | 10.7x |
2023E Revenue | | | 6.4x | | | 8.1x | | | 9.7x |
2022E EBITDA | | | 20x | | | 22x | | | 24x |
2023E EBITDA | | | 17x | | | 18x | | | 22x |
Financial Metric | | | Selected Multiple Range | | | Implied Equity Value Per Share |
2022E Revenue | | | 7.5x – 8.0x | | | $30.25 – $32.21 |
2023E Revenue | | | 6.0x – 6.5x | | | $30.39 – $32.85 |
Financial Metric | | | ironSource Implied Equity Value Per Share | | | Unity Implied Equity Value Per Share | | | Implied Exchange Ratio |
Selected Public Companies Analysis | |||||||||
2022E EBITDA / 2022E Revenue | | | $2.33 – $3.17 | | | $30.25 – $32.21 | | | 0.0725x – 0.1049x |
2022E Revenue / 2022E Revenue | | | $2.51 – $3.20 | | | $30.25 – $32.21 | | | 0.0779x – 0.1057x |
2023E EBITDA / 2023E Revenue | | | $2.35 – $3.16 | | | $30.39 – $32.85 | | | 0.0715x – 0.1041x |
2023E Revenue / 2023E Revenue | | | $2.57 – $3.42 | | | $30.39 – $32.85 | | | 0.0783x – 0.1124x |
Discounted Cash Flow Analysis | |||||||||
2028E EBITDA | | | $3.74 – $5.40 | | | $41.74 – $51.94 | | | 0.0721x – 0.1294x |
Financial Metric | | | ironSource Implied Equity Ownership Percentage | | | Unity Implied Equity Ownership Percentage |
Total Net Revenue | | | | | ||
2022E | | | 38% | | | 62% |
2023E | | | 38% | | | 62% |
2024E | | | 36% | | | 64% |
Adjusted Net Revenue | | | | | ||
2022E | | | 22% | | | 78% |
2023E | | | 22% | | | 78% |
2024E | | | 22% | | | 78% |
Gross Profit | | | | | ||
2022E | | | 41% | | | 59% |
2023E | | | 41% | | | 59% |
2024E | | | 40% | | | 60% |
Adjusted EBITDA | | | | | ||
2022E | | | N/A | | | N/A |
2023E | | | 85% | | | 15% |
2024E | | | 61% | | | 39% |
Premium Paid to Closing Stock Price of | | | 25th Percentile | | | Median | | | 75th Percentile |
One Trading Day Prior | | | 15% | | | 18% | | | 28% |
One Month Prior | | | 17% | | | 25% | | | 32% |
(in millions) | | | Management Projections | | | Extrapolations | ||||||||||||||||||||||||
| | 2022E | | | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | | | 2028E | | | 2029E | | | 2030E | | | 2031E | |
Revenue | | | $1,329 | | | $1,670 | | | $2,164 | | | $2,768 | | | $3,460 | | | $4,290 | | | $5,277 | | | $6,438 | | | $7,790 | | | $9,347 |
Gross Profit | | | 989 | | | 1,239 | | | 1,605 | | | 2,046 | | | $2,560 | | | 3,183 | | | 3,926 | | | 4,802 | | | 5,827 | | | 7,011 |
Adjusted EBITDA(1) | | | (61) | | | 52 | | | 245 | | | 499 | | | 692 | | | 944 | | | 1,266 | | | 1,674 | | | 2,181 | | | 2,804 |
Unlevered free cash flow(2) | | | (668) | | | (640) | | | (595) | | | (506) | | | (430) | | | (335) | | | (170) | | | 85 | | | 452 | | | 972 |
(1) | Adjusted EBITDA, a non-GAAP measure, is defined as net income, before interest expense, income taxes, depreciation and amortization and excluding the impact of stock-based compensation expense. |
(2) | Unlevered free cash flow, a non-GAAP measure, is defined as Adjusted EBITDA, less stock-based compensation which is treated as a cash expense, effective cash income taxes, capital expenditures and capitalized software and the impact of changes in working capital. |
(in millions) | | | Management Projections | | | Extrapolations | ||||||||||||||||||||||||
| | 2022E(1) | | | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | | | 2028E | | | 2029E | | | 2030E | | | 2031E | |
Revenue | | | $770 | | | $952 | | | $1,165 | | | $1,401 | | | $1,681 | | | $2,000 | | | $2,320 | | | $2,621 | | | $2,884 | | | $3,172 |
Gross Profit | | | 662 | | | 821 | | | 1,007 | | | 1,213 | | | 1,459 | | | 1,740 | | | 2,018 | | | 2,281 | | | 2,509 | | | 2,728 |
Adjusted EBITDA(2) | | | 235 | | | 304 | | | 375 | | | 460 | | | 572 | | | 685 | | | 795 | | | 898 | | | 988 | | | 1,142 |
Unlevered free cash flow(3) | | | 108 | | | 157 | | | 194 | | | 243 | | | 311 | | | 374 | | | 433 | | | 490 | | | 539 | | | 539 |
(1) | Revenue and Adjusted EBITDA used in the Unity projections for ironSource represent the middle of ironSource’s previously disclosed guidance range for 2022E performance, as set forth in a Report of Foreign Private Issuer on Form 6-K dated May 12, 2022. |
(2) | Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding stock-based compensation expense and certain non-recurring items. |
(3) | Unlevered free cash flow, a non-GAAP measure, is defined as Adjusted EBITDA, less stock based compensation which is treated as a cash expense, effective cash income taxes, capital expenditures and capitalized software and the impact of changes in working capital. Unlevered free cash flow was calculated by Morgan Stanley based upon information provided by Unity management and derived from the ironSource projections provided to Unity. Unity management reviewed such calculated amounts and approved the use of such amounts by Morgan Stanley in its analysis. |
(in millions) | | | Management Projections | ||||||||||||||||||
| | 2022E(1) | | | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | | | 2028E | |
Revenue | | | $770 | | | $952 | | | $1,165 | | | $1,401 | | | $1,681 | | | $2,000 | | | $2,379 |
Gross Profit | | | 662 | | | 821 | | | 1,007 | | | 1,213 | | | 1,459 | | | 1,740 | | | |
Adjusted EBITDA(2) | | | 235 | | | 304 | | | 375 | | | 460 | | | 572 | | | 685 | | | 815 |
Unlevered free cash flow(3) | | | | | 134 | | | 167 | | | 209 | | | 266 | | | 320 | | |
(1) | Revenue and Adjusted EBITDA used in the ironSource management projections represent the middle of ironSource’s previously disclosed guidance range for 2022E performance, as set forth in a Report of Foreign Private Issuer on Form 6-K dated May 12, 2022. |
(2) | Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding stock-based compensation expense and certain non-recurring items. |
(3) | Unlevered free cash flow is defined as Adjusted EBITDA minus share based compensation, marginal income taxes, capital expenditures, capitalized software, and plus or minus (as applicable) the annual change in net working capital. Unlevered free cash flow was calculated by Jefferies based upon the ironSource projections, which values were reviewed by the management of ironSource. |
(in millions) | | | Management Projections | ||||||||||||||||||
| | 2022E | | | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | | | 2028E | |
Revenue | | | $1,329 | | | $1,670 | | | $2,164 | | | $2,768 | | | $3,460 | | | $4,290 | | | $5,277 |
Gross Profit | | | 989 | | | 1,239 | | | 1,605 | | | 2,046 | | | | | | | |||
Adjusted EBITDA(1) | | | (61) | | | 52 | | | 245 | | | 499 | | | 692 | | | 944 | | | 1,266 |
Unlevered free cash flow(2) | | | | | (615) | | | (571) | | | (485) | | | (399) | | | (284) | | |
(1) | Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding stock-based compensation expense and certain non-recurring items. |
(2) | Unlevered free cash flow is defined as Adjusted EBITDA minus share based compensation, marginal income taxes, capital expenditures, capitalized software, and plus or minus (as applicable) the annual change in net working capital. Unlevered free cash flow was calculated by Jefferies based upon the Unity projections, which values were reviewed by the management of ironSource. |
• | Each of Tomer Bar-Zeev, ironSource’s Chairman and Chief Executive Officer, Arnon Harish, ironSource’s President, and Eyal Milrad ironSource’s Chief Strategy Officer, is anticipated to agree with Unity on new employment terms for his employment, post-merger. |
• | Tomer Bar-Zeev is expected to be appointed to the Unity board upon consummation of the merger. |
• | organization, good standing and qualification to conduct business; |
• | capitalization; |
• | authority to enter into the merger and the binding nature of the merger agreement; |
• | required shareholder approvals; |
• | governmental approvals; |
• | compliance with SEC filing requirements; |
• | conformity with GAAP and SEC requirements of financial statements filed with the SEC; |
• | the absence of undisclosed liabilities; |
• | the absence of any material adverse effect (as defined below under “—Definition of Material Adverse Effect”) with respect to such party since December 31, 2021; |
• | compliance with applicable laws, the absence of governmental investigations and the possession of and compliance with licenses and permits necessary for the conduct of business; |
• | employee benefit plans and labor matters; |
• | tax matters; |
• | the absence of certain legal proceedings, investigations and governmental orders against such party and its subsidiaries; |
• | intellectual property matters; |
• | privacy and data protection matters; |
• | real property and assets; |
• | material agreements; |
• | environmental matters; |
• | customers, vendors, partners and advertisers; |
• | insurance; |
• | accuracy of information supplied by such party for inclusion in this joint proxy statement/prospectus; |
• | receipt of an opinion from such party’s financial adviser; |
• | inapplicability of anti-takeover agreements or plans or state takeover statutes; |
• | the absence of undisclosed related party transactions; and |
• | the absence of any undisclosed broker’s or finder’s fees. |
• | any changes in Israel, United States or other jurisdiction, regional, global or international economic conditions, including any changes affecting financial, credit, foreign exchange or capital market conditions; |
• | any changes in conditions, practices, guidelines, policies, requirements or standards in any industry or market in which such party and its subsidiaries operate; |
• | any changes in political, geopolitical, regulatory or legislative conditions in Israel, the United States or any other country or region of the world; |
• | any changes after the date of the merger agreement in GAAP or the interpretation thereof; |
• | any changes after the date of the merger agreement in applicable law or the interpretation thereof; |
• | any failure by such party to meet any internal or published projections, estimates or expectations of revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by such party to meet its internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from the definition of a “material adverse effect” may be taken into account); |
• | any acts of terrorism or sabotage, war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions, natural disasters, epidemics or pandemics (including the COVID-19 pandemic) or other force majeure events, including any material worsening of such conditions threatened or existing as of the date of the merger agreement; |
• | the execution and delivery of the merger agreement, the identity of such party or any of its subsidiaries, the pendency or consummation of the merger agreement, the merger and the other transactions contemplated thereby (including the effect thereof on the relationships with current or prospective customers, suppliers, distributors, partners, financing sources, employees or sales representatives), or the public announcement of the merger agreement or the transactions contemplated thereby, including any litigation arising out of or relating to the merger agreement or the transactions contemplated thereby, in each case only to the extent resulting from the execution and delivery of the merger agreement, the identity of such party or any of its subsidiaries, the pendency or consummation of the merger agreement, the merger or the transactions contemplated thereby, or the public announcement of the merger agreement and the transactions contemplated thereby, as applicable (other than with respect to any representation or warranty to the extent the purpose of such representation or warranty is to address, as applicable, the consequences resulting from the execution and delivery of the merger agreement, the pendency or consummation of the merger agreement, the merger and the other transactions contemplated by the merger agreement or to address the consequences of litigation); |
• | any action or failure to take any action which action or failure to act is requested in writing by such party or otherwise expressly required by the merger agreement; and |
• | any changes in such party’s stock price or the trading volume of such party’s stock or any change in the ratings or ratings outlook for such party or any of its subsidiaries (it being understood that the facts or occurrences giving rise or contributing to such changes that are not otherwise excluded from this definition of a “material adverse effect” may be taken into account); |
• | amend, modify, waive, rescind, change or otherwise restate ironSource’s of any of its subsidiary’s articles of association, certificate of incorporation, bylaws or equivalent organizational documents; |
• | authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares or other equity interests (whether in cash, assets, shares or other securities of ironSource of any of its subsidiaries) (other than dividends or distributions made by any wholly owned subsidiary to ironSource or any other wholly owned subsidiary), or enter into any agreement or arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its share capital or other equity interests or securities; |
• | split, combine, subdivide, reduce or reclassify any of its share capital or other equity interests, or redeem, purchase or otherwise acquire any of its share capital or other equity interests, or issue or authorize the issuance of any of its share capital or other equity interests or any other securities in respect of, in lieu of or in substitution for, its share capital or other equity interests, except for (A) the acceptance of ironSource ordinary shares as payment of the exercise price of ironSource options or for withholding taxes in respect of ironSource equity awards or (B) any such transaction involving only wholly owned subsidiaries; |
• | issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares, voting securities or other equity interest in ironSource of any of its subsidiaries or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” shares, “phantom” share rights, share appreciation rights or share based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested ironSource equity award under any existing ironSource equity plan (except as otherwise provided by the express terms of any ironSource equity award), other than (A) issuances of ironSource Class A ordinary shares upon conversion of ironSource Class B ordinary shares, issuances of ironSource ordinary shares in respect of any exercise of ironSource options outstanding on the date of the merger agreement or the vesting or settlement of ironSource equity awards outstanding on the date of the merger agreement, in all cases in accordance with their respective terms as of the date of the merger agreement, (B) sales of ironSource ordinary |
• | except as required by any ironSource benefit plan as in existence as of the date of the merger agreement or entered into in accordance with the terms of the merger agreement, and except in the ordinary course of business, (A) increase the compensation or benefits payable or to become payable to current Service Providers in an amount in excess of a percentage, set forth in the merger agreement, of the aggregate cost of such compensation and benefits in effect as of the date of the merger agreement, (B) grant to its current or former Service Providers any material increase in severance or termination pay, (C) pay or award, or commit to pay or award, any bonuses, retention or incentive compensation, other than sales commissions, to any of its current or former service providers other than in connection with annual or periodic performance review, (D) establish, adopt, enter into, amend or terminate any collective bargaining agreement or ironSource benefit plan except for any amendments to health and welfare plans in the ordinary course of business consistent with past practice that do not contravene the other covenants set forth in this clause (v) or materially increase the cost to ironSource of maintaining such ironSource benefit plan or the benefits provided under the merger agreement, (E) take any action to materially amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any ironSource benefit plan, (F) terminate the employment of any employee at the level of vice president or above, other than for cause or failure to meet performance or evaluation targets, (G) hire any new employees, except for non-officer employees below the vice president level, other than in order to replace such employees who ceased to be employed and recruitment as part of existing expansion or growth plans, or (H) provide any funding for any rabbi trust or similar arrangement; |
• | acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for any acquisitions of, any entity, business or assets that constitute a business or division of any person, or all or substantially all of the assets of any person, or otherwise engage in any mergers, consolidations or business combinations, except for (A) transactions solely between ironSource and a wholly owned ironSource subsidiary or solely between wholly owned ironSource subsidiaries or (B) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice; |
• | liquidate (completely or partially), dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization or reorganization between or among any of ironSource and/or any of its subsidiaries), or adopt any plan or resolution providing for any of the foregoing; |
• | make any loans, advances or capital contributions to, or investments (other than within the amount permitted under clause (vi) above) in, any other person, except for (A) loans solely among ironSource and its wholly owned ironSource subsidiaries or solely among ironSource’s wholly owned ironSource subsidiaries, (B) advances for reimbursable employee expenses in the ordinary course of business, and (C) credit to customers or advancement of expenses to suppliers; |
• | sell, lease, license (other than sales and non-exclusive licenses in the ordinary course of business), assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any lien (other than certain liens permitted by the merger agreement), any of its material properties, rights or assets, except (A) dispositions of obsolete or worthless equipment, (B) liens to financial institutions or banks in connection with ongoing services over assets or properties that are not material to ironSource and its subsidiaries, taken as a whole and (B) pursuant to transactions solely among ironSource and its wholly owned ironSource subsidiaries or solely among wholly owned ironSource subsidiaries; |
• | act, or fail to act, in each case in any manner that would reasonably be expected to result in any loss, lapse, abandonment, invalidity or unenforceability of any material ironSource intellectual property rights; |
• | assign, transfer, or dispose of any material ironSource intellectual property rights; |
• | enter into or become bound by, or amend, modify, terminate or waive any material contract related to the acquisition or disposition or granting of any license with respect to material Intellectual property or material intellectual property rights of any person, or otherwise encumber any Intellectual property or intellectual property rights, other than in the ordinary course of business with respect to non-exclusive licenses; |
• | (A) enter into any contract that would, if entered into prior to the date of the merger agreement, be a material contract (as defined in the merger agreement), or (B) (1) modify, amend, extend or voluntarily terminate (other than non-renewals occurring in the ordinary course of business consistent with past practice) any Material contract or (2) waive, release or assign any rights or claims under the merger agreement, in the case of clause (A) and (B), other than in the ordinary course of business, or (C) modify or amend in any material respect any employment agreement (other than for actions permitted under the fifth bullet above); |
• | make any capital expenditure or expenditures, enter into agreements or arrangements providing for capital expenditure or expenditures or otherwise commit to do so; |
• | commence (other than any collection action in the ordinary course of business consistent with past practice), waive, release, assign, compromise or settle any litigation, investigation or proceeding (for the avoidance of doubt, including with respect to matters in which ironSource or any ironSource subsidiary is a plaintiff, or in which any of their officers or directors in their capacities as such are parties), other than the compromise or settlement of any litigation or proceeding that involves only the payment of monetary damages not in excess of certain agreed minimum amounts; |
• | make any material change in financial accounting policies or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP or applicable law; |
• | make, change or revoke any material tax election, adopt or change any tax accounting period or material method of tax accounting, materially amend any material tax return, settle or compromise any material liability for taxes or any tax audit, claim or other proceeding relating to a material amount of taxes unless the settlement does not involve imposition of a material liability or restriction on ironSource, enter into any “closing agreement” under Section 7121 of the Code (or any similar provision of state, local or non-U.S. law); |
• | redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the terms of any Indebtedness or any derivative financial instruments or arrangements (including swaps, caps, floors, futures, hedges, forward contracts and option agreements), or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for (A) any indebtedness solely among ironSource and its wholly owned subsidiaries or solely among wholly owned subsidiaries, (B) indebtedness in an aggregate principal amount outstanding at any time incurred by ironSource or any of its subsidiaries that does not exceed certain agreed minimum amounts and (C) derivative financial instruments or arrangements in the ordinary course of business consistent with past practices and not for speculative purposes; |
• | enter into any related party contract or collective bargaining agreement; |
• | adopt or otherwise implement any stockholder rights plan, “poison-pill” or other comparable agreement; |
• | subject to certain exceptions described in the merger agreement, take or cause to be taken any action that would reasonably be expected to materially delay, impede or prevent the consummation of the transactions contemplated by the merger agreement on or before April 13, 2023 (referred to as the “Outside Date”); |
• | cancel or fail to use commercially reasonable efforts to replace or renew any material insurance policies; |
• | enter into a new line of business outside of the existing business of ironSource and its subsidiaries, taken as a whole, where such new line of business would be material to ironSource and its subsidiaries, taken as a whole; |
• | take any action, or knowingly fail to take any action, which action or failure to act would or would reasonably be expected to prevent or impede the merger from qualifying for the intended U.S. tax treatment; |
• | take any action, or knowingly fail to take any action, which action or failure to act would or would reasonably be expected to result in non-compliance with or a breach of the ruling of the ITA in accordance with the Ordinance, which provided that the transfer of certain assets of ironSource to TypeA Holdings Ltd. was not taxable to ironSource as of the date of transfer (including all restrictions and requirements therein); |
• | take any action, or knowingly fail to take any action, which would result in ironSource or any of ironSource subsidiaries claiming a capital loss with respect to any aspect of the transaction entered into with Thoma Bravo Advantage on March 20, 2021; or |
• | agree or authorize, in writing or otherwise, to take any of the foregoing actions. |
• | amend, modify, waive, rescind, change or otherwise restate Unity’s of any of its subsidiary’s articles of association, certificate of incorporation, bylaws or equivalent organizational documents; |
• | authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares or other equity interests (whether in cash, assets, shares or other securities of Unity of any of its subsidiaries) (other than dividends or distributions made by any wholly owned subsidiary to Unity or any other wholly owned subsidiary), or enter into any agreement or arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its share capital or other equity interests or securities; |
• | split, combine, subdivide, reduce or reclassify any of its share capital or other equity interests, or redeem, purchase or otherwise acquire any of its share capital or other equity interests, or issue or authorize the issuance of any of its share capital or other equity interests or any other securities in respect of, in lieu of or in substitution for, its share capital or other equity interests, except for (A) the acceptance of Unity common stock as payment of the exercise price of Unity options or for withholding taxes in respect of Unity equity awards or (B) any such transaction involving only wholly owned subsidiaries; |
• | issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares, voting securities or other equity interest in Unity or any of its subsidiaries, including for the avoidance of doubt, issuance of Unity preferred stock (to ensure obtainment of Dual Listing Permit, as defined below, to the extent it becomes needed), or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” shares, “phantom” share rights, share appreciation rights or share based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Unity stock option or restricted stock unit under any existing Unity equity plan (except as |
• | except as required by any Unity benefit plan as in existence as of the date of the merger agreement or entered into in accordance with the terms of the merger agreement, and except in the ordinary course of business, (A) increase the compensation or benefits payable or to become payable to current service providers in an amount in excess of a percentage, set forth in the merger agreement, of the aggregate cost of such compensation and benefits in effect as of the date of the merger agreement, (B) grant to its current or former service providers any material increase in severance or termination pay, (C) pay or award, or commit to pay or award, any bonuses, retention or incentive compensation, other than sales commissions, to any of its current or former service providers other than in connection with annual or periodic performance review, (D) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Unity benefit plan except for any amendments to health and welfare plans in the ordinary course of business consistent with past practice that do not contravene the other covenants set forth in this clause (v) or materially increase the cost to Unity of maintaining such Unity benefit plan or the benefits provided under the merger agreement, (E) take any action to materially amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Unity benefit plan, (F) terminate the employment of any employee at the level of vice president or above, other than for cause or failure to meet performance or evaluation targets, (G) hire any new employees, except for non-officer employees below the vice president level, other than in order to replace such employees who ceased to be employed and recruitment as part of existing expansion or growth plans, or (H) provide any funding for any rabbi trust or similar arrangement; |
• | acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or authorize or announce an intention to so acquire, or enter into any agreements providing for any acquisitions of, any entity, business or assets that constitute a business or division of any person, or all or substantially all of the assets of any person, or otherwise engage in any mergers, consolidations or business combinations, except for (A) transactions solely between Unity and a wholly owned Unity subsidiary or solely between wholly owned Unity subsidiaries or (B) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice; |
• | liquidate (completely or partially), dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization or reorganization between or among any of Unity and/or any of its subsidiaries), or adopt any plan or resolution providing for any of the foregoing; |
• | make any loans, advances or capital contributions to, or investments (other than within the amount permitted under the sixth bullet point above) in, any other person, except for (A) loans solely among Unity and its wholly owned Unity subsidiaries or solely among Unity’s wholly owned Unity subsidiaries, (B) advances for reimbursable employee expenses in the ordinary course of business, and (C) credit to customers or advancement of expenses to suppliers; |
• | sell, lease, license (other than sales and non-exclusive licenses in the ordinary course of business), assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any lien (other than certain liens permitted by the merger agreement), any of its material properties, rights or assets, except (A) dispositions of obsolete or worthless equipment, (B) liens to financial institutions or banks in connection with ongoing services over assets or properties that are not material to Unity and its subsidiaries, taken as a whole and (B) pursuant to transactions solely among Unity and its wholly owned Unity subsidiaries or solely among wholly owned Unity subsidiaries; |
• | act, or fail to act, in each case in any manner that would reasonably be expected to result in any loss, lapse, abandonment, invalidity or unenforceability of any material Unity intellectual property rights; |
• | assign, transfer, or dispose of any material Unity intellectual property rights; |
• | enter into or become bound by, or amend, modify, terminate or waive any material contract related to the acquisition or disposition or granting of any license with respect to material Intellectual property or material intellectual property rights of any person, or otherwise encumber any Intellectual property or intellectual property rights, other than in the ordinary course of business with respect to non-exclusive licenses; |
• | (A) enter into any contract that would, if entered into prior to the date of the merger agreement, be a material contract (as defined in the merger agreement), or (B) (1) modify, amend, extend or voluntarily terminate (other than non-renewals occurring in the ordinary course of business consistent with past practice) any material contract or (2) waive, release or assign any rights or claims under the merger agreement, in the case of clause (A) and (B), other than in the ordinary course of business, or (C) modify or amend in any material respect any employment agreement (other than for actions permitted under the fifth bullet above); |
• | make any capital expenditure or expenditures, enter into agreements or arrangements providing for capital expenditure or expenditures or otherwise commit to do so; |
• | commence (other than any collection action in the ordinary course of business consistent with past practice), waive, release, assign, compromise or settle any litigation, investigation or proceeding (for the avoidance of doubt, including with respect to matters in which Unity or any Unity subsidiary is a plaintiff, or in which any of their officers or directors in their capacities as such are parties), other than the compromise or settlement of any litigation or proceeding that involves only the payment of monetary damages not in excess of certain agreed minimum amounts; |
• | make any material change in financial accounting policies or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP or applicable law; |
• | make, change or revoke any material tax election, adopt or change any tax accounting period or material method of tax accounting, materially amend any material tax return, settle or compromise any material liability for taxes or any tax audit, claim or other proceeding relating to a material amount of taxes unless the settlement does not involve imposition of a material liability or restriction on Unity, enter into any “closing agreement” under Section 7121 of the Code (or any similar provision of state, local or non-U.S. law); |
• | redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the terms of any Indebtedness or any derivative financial instruments or arrangements (including swaps, caps, floors, futures, hedges, forward contracts and option agreements), or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for (A) any indebtedness solely among Unity and its wholly owned subsidiaries or solely among wholly owned subsidiaries and (B) indebtedness in an aggregate principal amount outstanding at any time incurred by Unity or any of its subsidiaries that does not exceed certain agreed minimum amounts, and (C) derivative financial instruments or arrangements in the ordinary course of business consistent with past practices and not for speculative purposes; |
• | enter into any related party contract or collective bargaining agreement; |
• | adopt or otherwise implement any stockholder rights plan, “poison-pill” or other comparable agreement; |
• | subject to certain exceptions described in the merger agreement, take or cause to be taken any action that would reasonably be expected to materially delay, impede or prevent the consummation of the transactions contemplated by the merger agreement on or before the Outside Date; |
• | cancel or fail to use commercially reasonable efforts to replace or renew any material insurance policies; |
• | enter into a new line of business outside of the existing business of Unity and its subsidiaries, taken as a whole, where such new line of business would be material to Unity and its subsidiaries, taken as a whole; |
• | take any action, or knowingly fail to take any action, which action or failure to act would or would reasonably be expected to prevent or impede the merger from qualifying for the intended U.S. tax treatment; |
• | except pursuant to the merger agreement, acquire, own, or have any options or other rights to acquire, any ironSource ordinary shares or other equity interests in ironSource; or |
• | agree or authorize, in writing or otherwise, to take any of the foregoing actions. |
• | solicit, initiate or knowingly encourage or facilitate (including by way of providing non-public information) any inquiry, proposal or offer, or the making, submission or announcement of any inquiry, proposal or offer, which constitutes or would reasonably be expected to lead to a ironSource Acquisition Proposal (as such term is defined in the section titled “—Definitions of Competing Proposals”) (provided that, if ironSource receives, prior to the ironSource shareholder approval being obtained, a bona fide written ironSource Acquisition Proposal that did not result from a breach of the merger agreement, ironSource may contact the person who has made such ironSource Acquisition Proposal solely for purposes of requesting a clarification of any ambiguous terms and conditions thereof (and not for purposes of negotiating or engaging in any discussions regarding or relating thereto) so that ironSource may inform itself about such ironSource Acquisition Proposal); |
• | participate in any negotiations regarding, or furnish to any person any non-public information relating to, ironSource or any ironSource subsidiary in connection with an actual or potential ironSource Acquisition Proposal; |
• | adopt, approve, endorse or recommend, or propose to adopt, approve, endorse or recommend, any ironSource Acquisition Proposal; |
• | withdraw, change, amend, modify or qualify, or propose to withdraw, change, amend, modify or qualify, in a manner adverse to Unity, the recommendation of the ironSource board that ironSource shareholders provide the ironSource shareholder approval; |
• | if an ironSource Acquisition Proposal has been publicly disclosed, fail to publicly recommend against any such ironSource Acquisition Proposal within ten business days after the public disclosure of such ironSource Acquisition Proposal (or subsequently withdraw, change, amend, modify or qualify, in a manner adverse to Unity, such rejection of such ironSource Acquisition Proposal) and reaffirm the recommendation of the ironSource board that ironSource shareholders provide the ironSource shareholder approval within such ten business day period (or, if earlier, by the second business day prior to the ironSource special general meeting); |
• | fail to include the recommendation of the ironSource board that ironSource shareholders provide the ironSource shareholder approval in this joint proxy statement/prospectus; |
• | approve, or authorize, or cause ironSource or any ironSource subsidiary to enter into, any merger agreement, acquisition agreement, letter of intent, memorandum of understanding, agreement in principal, option agreement, joint venture agreement, partnership agreement or similar agreement or document providing for, any ironSource Acquisition Proposal (other than certain acceptable confidentiality agreements described in the merger agreement); |
• | call or convene a general meeting of ironSource shareholders to consider a proposal that would reasonably be expected to materially impair, prevent or delay the consummation of the transactions contemplated by the merger agreement; or |
• | resolve or agree to do any of the foregoing (any act described in the third through ninth bullets above is referred to as an “ironSource Change of Recommendation”). |
• | if ironSource receives an unsolicited, bona fide, written ironSource Acquisition Proposal that did not result from a breach of the non-solicitation provisions set forth in the merger agreement, which the ironSource board determines in good faith after consultation with ironSource’s outside legal counsel and financial advisers (i) constitutes an ironSource Superior Proposal (as such term is defined in the section titled “—Definitions of Competing Proposals”) or (ii) would reasonably be expected to result in an ironSource Superior Proposal and, in each case, that the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Israeli law (provided, however, that in order to determine the appropriate standards that would apply to such fiduciary duties, the ironSource board may also consider and act on the basis of the fiduciary duties owed by a board of directors to the shareholders of a company under Delaware law), then ironSource may take the following actions: |
○ | furnish nonpublic information with respect to ironSource and its subsidiaries to the person making such ironSource Acquisition Proposal, if, and only if, prior to so furnishing such information, ironSource receives from such person an executed confidentiality agreement and ironSource also provides Unity, prior to or substantially concurrently with the time such information is provided or made available to such person, any nonpublic information furnished to such other person that was not previously furnished to Unity (other than information that applicable laws prohibit from being provided to Unity, in which case, to the extent permissible, ironSource will inform Unity that such information has been made available to such person and that under applicable laws such information is prohibited from being provided to Unity (provided, however, that ironSource will use its commercially reasonable efforts to make appropriate substitute arrangements to permit reasonable disclosure of such information not in violation of such law)), and |
○ | engage in discussions or negotiations with such person with respect to such ironSource Acquisition Proposal; and |
• | the ironSource board may (in each case, subject to certain limitations contained in the merger agreement): |
○ | make an ironSource Change of Recommendation in response to certain intervening material events described in the merger agreement if the ironSource board has determined in good faith after consultation with ironSource’s outside legal counsel and financial advisers that the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Israeli law (provided, however, that in order to determine the appropriate standards that would apply to such fiduciary duties, the ironSource board may also consider and act on the basis of the fiduciary duties owed by a board of directors to the shareholders of a company under Delaware law); provided that: |
• | prior to ironSource taking any such action, ironSource will provide Unity with four business days’ prior written notice advising Unity that the ironSource board intends to effect an ironSource Change of Recommendation and specifying, in reasonable detail, the reasons therefor, and during such four business day period, ironSource will cause its representatives (including its executive officers) to negotiate in good faith (to the extent Unity desires to negotiate) any proposal by Unity to amend the terms and conditions of the merger agreement in a manner that would obviate the need to effect an ironSource Change of Recommendation |
○ | make an ironSource Change of Recommendation and cause ironSource to terminate the merger agreement in order to enter into an acquisition agreement providing for an unsolicited ironSource Acquisition Proposal received after the date of the merger agreement (which did not result from a breach of the merger agreement and such ironSource Acquisition Proposal is not withdrawn) if the ironSource board determines in good faith after consultation with ironSource’s outside legal counsel and financial advisers that such ironSource Acquisition Proposal constitutes an ironSource Superior Proposal, but only if the ironSource board has determined in good faith after consultation with ironSource’s outside legal counsel and financial advisers that failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Israeli Law (provided, however, that in order to determine the appropriate standards that would apply to such fiduciary duties, the ironSource board may also consider and act on the basis of the fiduciary duties owed by a board of directors to the shareholders of a company under Delaware law) provided that: |
• | prior to ironSource taking any such action, ironSource will provide Unity with four business days’ prior written notice advising Unity that the ironSource board intends to take such action and specifying the material terms and conditions of the ironSource Acquisition Proposal, including a copy of any proposed definitive documentation, and during such four business day period, ironSource will cause its representatives (including its executive officers) to negotiate in good faith (to the extent Unity desires to negotiate) any proposal by Unity to amend the terms and conditions of the merger agreement such that such ironSource Acquisition Proposal would no longer constitute an ironSource Superior Proposal and at the end of such four business day period the ironSource board again makes such ironSource Change of Recommendation (after in good faith taking into account the amendments proposed by Unity). |
• | solicit, initiate or knowingly encourage or facilitate (including by way of providing non-public information) any inquiry, proposal or offer, or the making, submission or announcement of any inquiry, proposal or offer, which constitutes or would reasonably be expected to lead to a Unity Acquisition Proposal (as such term is defined in the section titled “—Definitions of Competing Proposals”) (provided that, if Unity receives, prior to the approval of the Unity issuance proposal at the Unity special meeting being obtained, a bona fide written Unity Acquisition Proposal that did not result from a breach of the merger agreement, Unity may contact the person who has made such Unity Acquisition Proposal solely for purposes of requesting a clarification of any ambiguous terms and conditions thereof (and not for purposes of negotiating or engaging in any discussions regarding or relating thereto) so that Unity may inform itself about such Unity Acquisition Proposal); |
• | participate in any negotiations regarding, or furnish to any person any non-public information relating to, Unity or any Unity subsidiary in connection with an actual or potential Unity Acquisition Proposal; |
• | adopt, approve, endorse or recommend, or propose to adopt, approve, endorse or recommend, any Unity Acquisition Proposal; |
• | withdraw, change, amend, modify or qualify, or propose to withdraw, change, amend, modify or qualify, in a manner adverse to ironSource, the recommendation of the Unity board that stockholders provide the Unity stockholder approval; |
• | if a Unity Acquisition Proposal has been publicly disclosed, fail to publicly recommend against any such Unity Acquisition Proposal within ten business days after the public disclosure of such Unity |
• | fail to include the recommendation of the Unity board that stockholders provide the Unity stockholder approval in this joint proxy statement/prospectus; |
• | approve, or authorize, or cause Unity or any Unity subsidiary to enter into, any merger agreement, acquisition agreement, letter of intent, memorandum of understanding, agreement in principle, option agreement, joint venture agreement, partnership agreement or similar agreement or document providing for, any Unity Acquisition Proposal (subject to certain exceptions contained in the merger agreement); |
• | call or convene a general meeting of the stockholders of Unity to consider a proposal that would reasonably be expected to materially impair, prevent or delay the consummation of the transactions contemplated by the merger agreement; or |
• | resolve or agree to do any of the foregoing (any act described in the third through ninth bullets above is referred to as a “Unity Change of Recommendation”). |
• | if Unity receives an unsolicited, bona fide, written Unity Acquisition Proposal that did not result from a breach of the non-solicitation provisions set forth in the merger agreement, which the Unity board determines in good faith after consultation with Unity’s outside legal counsel and financial advisers (i) constitutes a Unity Superior Proposal (as such term is defined in the section titled “—Definitions of Competing Proposals”) or (ii) would reasonably be expected to result in a Unity Superior Proposal and, in each case, that the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Delaware law, then Unity may take the following actions: |
○ | furnish nonpublic information with respect to Unity and its subsidiaries to the person making such Unity Acquisition Proposal, if, and only if, prior to so furnishing such information, Unity receives from such person an executed acceptable confidentiality agreement pursuant to the merger agreement and Unity also provides ironSource, prior to or substantially concurrently with the time such information is provided or made available to such person, any nonpublic information furnished to such other person that was not previously furnished to ironSource (other than information that applicable laws prohibit from being provided to ironSource, in which case, to the extent permissible, Unity will inform ironSource that such information has been made available to such person and that under applicable laws such information is prohibited from being provided to ironSource (provided, however, that Unity will use its commercially reasonable efforts to make appropriate substitute arrangements to permit reasonable disclosure of such information not in violation of such law)); and |
○ | engage in discussions or negotiations with such person with respect to such Unity Acquisition Proposal. |
• | the Unity board may (in each case, subject to certain limitations contained in the merger agreement): |
○ | make a Unity Change of Recommendation in response to certain intervening material events described in the merger agreement if the Unity board has determined in good faith after consultation with Unity’s outside legal counsel and financial advisers that the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Delaware law; provided that: |
• | prior to Unity taking any such action, Unity will provide ironSource with four business days’ prior written notice advising ironSource that the Unity board intends to effect a Unity Change |
○ | make a Unity Change of Recommendation and cause Unity to terminate the merger agreement in order to enter into a Unity acquisition agreement providing for an unsolicited Unity Acquisition Proposal received after the date of the merger agreement (which did not result from a breach of the merger agreement and such Unity Acquisition Proposal is not withdrawn) if the Unity board determines in good faith after consultation with Unity’s outside legal counsel and financial advisers that such Unity Acquisition Proposal constitutes a Unity Superior Proposal, but only if the Unity board has determined in good faith after consultation with Unity’s outside legal counsel and financial advisers that failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Delaware law; provided that: |
• | prior to Unity taking any such action, Unity will provide ironSource with four business days’ prior written notice advising ironSource that the Unity board intends to take such action and specifying the material terms and conditions of the Unity Acquisition Proposal, including a copy of any proposed definitive documentation, and during such four business day period, Unity will cause its representatives (including its executive officers) to negotiate in good faith (to the extent ironSource desires to negotiate) any proposal by ironSource to amend the terms and conditions of the merger agreement such that such Unity Acquisition Proposal would no longer constitute a Unity Superior Proposal and at the end of such four business day period the Unity board again makes such Unity Change of Recommendation (after in good faith taking into account the amendments proposed by ironSource). |
• | any acquisition or purchase by any person, directly or indirectly, of more than 15% of any class of outstanding voting or equity securities of such party (whether by voting power or number of shares), or any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any person beneficially owning more than 15% of any class of outstanding voting or equity securities of such party (whether by voting power or number of shares); |
• | any merger, consolidation, share exchange, business combination, joint venture, recapitalization, reorganization or other similar transaction involving such party and a person pursuant to which the equity holders of such party immediately preceding such transaction hold less than 85% of the equity interests in the surviving, resulting or ultimate parent entity of such transaction (whether by voting power or number of shares); or |
• | any sale, lease, exchange, transfer or other disposition to a person of more than 15% of the consolidated assets of such party and its subsidiaries (measured by the fair market value thereof). |
• | preparing and filing or otherwise providing, in consultation with the other party and as promptly as practicable and advisable after the date of the merger agreement, all documentation to effect all necessary applications, notices, petitions, filings and other documents and to obtain as promptly as reasonably practicable all waiting period expirations or terminations, consents, clearances, waivers, licenses, orders, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party and/or any governmental entity in order to consummate the transactions contemplated by the merger agreement, including the merger (including the 103K tax ruling, the 102 tax ruling, the withholding tax ruling and/or the 104H tax ruling, as and if applicable); and |
• | taking all steps as may be necessary to obtain all such waiting period expirations or terminations, consents, clearances, waivers, licenses, registrations, permits, authorizations, orders and approvals. |
• | an application to a deferral of the Israeli tax liability of any holder of ironSource ordinary shares, if any, to such dates set forth in Section 104H of the Ordinance (referred to as the “104H tax ruling”). Any costs associated with the 104H tax ruling will be paid by ironSource and Unity prior to the closing on an equal basis; and/or |
• | with respect to holders of ironSource ordinary shares (other than recipients covered under the 102 tax ruling or 104H tax ruling, if any), an application (A) exempting Unity, the exchange agent, the surviving company and their respective agents from any obligation to withhold Israeli tax at source from any consideration payable or otherwise deliverable pursuant to the merger agreement, including the merger consideration, or clarifying that no such obligation exists, or (B) clearly instructing Unity, the exchange agent, the surviving company and their respective agents on how such withholding at source is to be executed, and in particular, with respect to the classes or categories of holders of ironSource ordinary shares from which tax is to be withheld (if any) and the rate or rates of withholding to be applied (referred to as the “withholding tax ruling”). |
• | ironSource shareholder approval and Unity stockholder approval. The ironSource shareholder approval (by the requisite majorities at the class and combined meetings to be held at the ironSource special general meeting) and the Unity stockholder approval will have been obtained. |
• | NYSE Listing. The shares of Unity common stock to be issued in the merger will have been approved for listing on the NYSE (or any successor inter-dealer quotation system or stock exchange thereto) subject to official notice of issuance. |
• | Registration Statement. The registration statement of which this joint proxy statement/prospectus forms a party will have become effective under the Securities Act and will not be the subject of any stop order or any proceedings by the SEC seeking a stop order. |
• | Government Consents. The waiting period (or extensions thereof) under the HSR Act relating to the transactions contemplated by the merger agreement will have expired or been terminated. |
• | No Legal Prohibition. No governmental entity of competent jurisdiction will have (i) enacted, issued or promulgated any law that is in effect as of immediately prior to the effective time or (ii) issued or granted any order or injunction (whether temporary, preliminary or permanent) that is in effect as of immediately prior to the effective time, in each case, which has the effect of restraining, enjoining or otherwise prohibiting the consummation of the merger. |
• | ISA No-Action Letter; Dual-Listing. Unity will have obtained either the ISA No-Action Letter or a Dual Listing Permit. |
• | Israeli Statutory Waiting Periods. At least 50 days will have elapsed after the filing of the ironSource merger proposal with the Companies Registrar and at least 30 days will have elapsed after the ironSource shareholder approval and the approval by the sole shareholder of Merger Sub. |
• | Representations and Warranties of ironSource. (A) Certain of the representations and warranties of ironSource related to its qualification and organization, corporate authority, the opinion of its financial adviser, takeover statues and anti-takeover laws and finders and brokers) (in each case, without giving |
• | Performance of Obligations of ironSource. The obligations, covenants and agreements of ironSource to be performed on or before the closing in accordance with the merger agreement will have been performed in all material respects. |
• | No ironSource Material Adverse Effect. An ironSource material adverse effect will not have occurred on or after the date of the merger agreement that is continuing. |
• | ironSource Officer’s Certificate. Unity will have received a certificate, dated as of the closing date, signed by the Chief Executive Officer or Chief Financial Officer of ironSource certifying that each of the foregoing conditions has been satisfied. |
• | Israeli Tax Withholding. The receipt of a written ruling, confirmation or instruction of the ITA with respect to holders of ironSource ordinary shares (other than recipients covered under the 102 tax ruling), which may include or be included in the 103K tax ruling, either (i) exempting Unity, the exchange agent, the surviving company and their respective agents from any obligation to withhold Israeli tax at source from the merger consideration, or clarifying that no such obligation exists, or (ii) clearly instructing Unity, the exchange agent, the surviving company and their respective agents on how such withholding at source is to be executed. |
• | Representations and Warranties of Unity and Merger Sub. (A) certain of the representations and warranties of Unity and Merger Sub related to qualification and organization, corporate authority, the opinion of its financial adviser, takeover statues and anti-takeover laws and finders and brokers) (in each case, without giving effect to any qualification as to materiality or Unity material adverse effect contained therein) will be true and correct in all material respects as of the date of the merger agreement and will be true and correct in all material respects as of the closing as though made as of the closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date); (B) certain of the representations and warranties of Unity and Merger Sub related to capitalization will be true and correct other than for de minimis inaccuracies as of the date of the merger agreement and will be true and correct other than for de minimis inaccuracies as of the closing as though made as of the closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date); (C) certain of the representations and warranties of Unity and Merger Sub related to the absence of certain changes and |
• | Performance of Obligations of Unity. The obligations, covenants and agreements of Unity and Merger Sub to be performed on or before the closing in accordance with the merger agreement will have been performed in all material respects. |
• | No Unity Material Adverse Effect. A Unity material adverse effect will not have occurred on or after the date of the merger agreement that is continuing. |
• | Unity Officer’s Certificate. ironSource will have received a certificate, dated as of the closing date, signed by the Chief Executive Officer or Chief Financial Officer of Unity certifying that each of the foregoing conditions has been satisfied. |
• | Tax Ruling. Either (x) the 103K tax ruling shall have been obtained or (y) if (and only if) ironSource in its sole discretion submits an application to obtain the 104H tax ruling, the 104H tax ruling shall have been obtained. |
• | ironSource Nominees Appointment. Unity shall have complied in all respects with its obligations under the section titled “—Unity Board Matters”. |
• | Lock Up Undertakings. If (and only if) the 103K tax ruling has been obtained, the agreements of certain shareholders of ironSource and certain stockholders of Unity containing certain restrictions on dispositions of their respective shares of Unity common stock shall be in full force and effect and not terminated or rescinded by the signatories thereto. |
○ | Immediately prior to the merger, certain stockholders of Unity who hold 5% or more of the outstanding shares of Unity common stock entered into an agreement pursuant to which, for a period of two years following the completion of the merger, they agreed not to transfer or dispose of more than 70% of the equity interests of Unity held by such holders (on an aggregate basis) as of the completion of the merger. |
○ | Immediately prior to the merger, certain shareholders of ironSource who hold 5% or more as well as members of management that hold less than 5% of the outstanding ironSource ordinary shares entered into an agreement pursuant to which, for a period of two years following the completion of the merger, they agreed not to transfer or dispose of more than 70% of the equity interests of Unity held by such holder as of immediately following the completion of the merger. |
• | By either ironSource or Unity: |
○ | if a governmental entity of competent jurisdiction will have issued a final, nonappealable order, injunction, decree or ruling in each case permanently restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the merger agreement; or |
○ | if the closing has not occurred on or before the Outside Date; provided that if as of such date the conditions set forth in the fourth and fifth bullets under “—Conditions to the Completion of the |
○ | if (A) approval of the ironSource merger proposal will not have been obtained upon a vote held at the ironSource special general meeting, or at any adjournment or postponement thereof or (B) approval of the Unity issuance proposal will not have been obtained upon a vote held at the Unity special meeting, or at any adjournment or postponement thereof; or |
• | By ironSource: |
○ | in the event that (A) Unity and/or Merger Sub will have breached, failed to perform or violated their respective covenants or agreements under the merger agreement or (B) any of the representations and warranties of Unity or Merger Sub set forth in the merger agreement will have become inaccurate, in either case of clauses (A) or (B), in a manner that would give rise to the failure of a condition set forth in the first three bullets under “—Conditions to the Completion of the Merger—Conditions to Obligations of ironSource” and such breach, failure to perform, violation or inaccuracy is not capable of being cured by the Outside Date or, if capable of being cured by the Outside Date, is not cured by Unity or Merger Sub, as applicable, before the earlier of (x) the business day immediately prior to the Outside Date and (y) the 30th calendar day following receipt of written notice from ironSource of such breach, failure to perform, violation or inaccuracy; provided that ironSource will not have the right to terminate the merger agreement if ironSource is then in breach of any of its representations, warranties, covenants or agreements contained in the merger agreement, which breach would give rise to the failure of a condition set forth in the first three bullets under “—Conditions to the Completion of the Merger—Conditions to Obligations of Unity and Merger Sub”; or |
○ | if (i) prior to obtaining approval of the Unity issuance proposal, the Unity board will have effected a Unity Change of Recommendation, or (ii) Unity has materially breached the section of the merger agreement describe under “—No Solicitation; Changes of Recommendation—No Solicitation by Unity”; or |
○ | prior to obtaining approval of the ironSource merger proposal, in order to effect a ironSource Change of Recommendation and substantially concurrently enter into a definitive agreement providing for a ironSource Superior Proposal; provided that (x) ironSource has complied in all material respects with the terms of the section of the merger agreement described under “—No Solicitation; Changes of Recommendation—No Solicitation by ironSource” and (y) substantially concurrently with or prior to (and as a condition to) the termination of the merger agreement, ironSource pays to Unity the ironSource Termination Fee described below under “—Termination Fees”; or |
• | By Unity: |
○ | in the event that (A) ironSource will have breached, failed to perform or violated its covenants or agreements under the merger agreement or (B) any of the representations and warranties of ironSource set forth in the merger agreement will have become inaccurate, in either case of clauses (A) or (B), in a manner that would give rise to the failure of a condition set forth in the first three bullets under “—Conditions to the Completion of the Merger—Conditions to Obligations of ironSource” and such breach, failure to perform, violation or inaccuracy is not capable of being cured by the Outside Date or, if capable of being cured by the Outside Date, is |
○ | if (i) prior to obtaining approval of the ironSource merger proposal, the ironSource board will have effected an ironSource Change of Recommendation, or (ii) ironSource has materially breached the section of the merger agreement describe under “—No Solicitation; Changes of Recommendation—No Solicitation by ironSource”; or |
○ | prior to obtaining approval of the Unity issuance proposal, in order to effect a Unity Change of Recommendation and substantially concurrently enter into a definitive agreement providing for a Unity Superior Proposal; provided that (x) Unity has complied in all material respects with the terms of the section of the merger agreement describe under “—No Solicitation; Changes of Recommendation—No Solicitation by Unity” and (y) substantially concurrently with or prior to (and as a condition to) the termination of the merger agreement, Unity pays to ironSource the Unity Termination Fee described below under “—Termination Fees”. |
(1) | a citizen or individual resident of the United States; |
(2) | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof, or the District of Columbia; |
(3) | an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
(4) | a trust if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (b) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes. |
• | partnerships (or entities or arrangements treated as partnerships for U.S. federal income tax purposes) and partners therein; |
• | financial institutions; |
• | dealers in securities; |
• | insurance companies; |
• | tax-exempt entities or governmental organizations; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | controlled foreign corporations; |
• | passive foreign investment companies; |
• | holders that actually or constructively own five percent or more (by vote or value) of ironSource ordinary shares, or, following the merger, Unity common stock, |
• | U.S. expatriates and former long-term residents of the United States; |
• | U.S. Holders whose functional currency is not the U.S. dollar; |
• | U.S. Holders who are required to accelerate the recognition of any item of gross income with respect to ironSource ordinary shares (or, after the merger, Unity common stock) as a result of such income being recognized on an applicable financial statement; |
• | tax-qualified retirement plans; |
• | holders deemed to hold ironSource ordinary shares or Unity common stock under the constructive sale provisions of the Code; |
• | holders who acquired ironSource ordinary shares pursuant to the exercise of an employee stock option or right or otherwise as compensation and holders who hold ironSource ordinary shares or Unity common stock as part of a hedge, straddle, conversion, or other integrated transaction). |
• | a U.S. Holder who receives shares of Unity common stock in exchange for ironSource ordinary shares pursuant to the merger will not recognize gain or loss; |
• | the aggregate tax basis of the shares of Unity common stock received in the merger will be the same as the aggregate tax basis of the ironSource ordinary shares exchanged therefor; and |
• | the holding period of the shares of Unity common stock received in the merger will include the holding period of the ironSource ordinary shares exchanged therefor. |
• | such gain is “effectively connected” with a trade or business of the Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to the Non-U.S. Holder’s permanent establishment in the United States); |
• | the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of the exchange and certain other conditions are met; or |
• | the Non-U.S. Holder owned, directly or under certain constructive ownership rules of the Code, more than 5% of the outstanding shares of Unity common stock at any time during the five-year period preceding the date of disposition, and Unity is, or has been during the shorter of the five-year period preceding the date of disposition or the period that the Non-U.S. Holder held Unity common stock, a “United States real property holding corporation” or “USRPHC” under the Code. |
• | 1,000,000,000 shares are designated as common stock; and |
• | 100,000,000 shares are designated as preferred stock. |
• | before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; |
• | upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, those shares owned (1) by persons who are directors and also officers and (2) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
• | on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. |
• | any merger or consolidation involving the corporation and the interested stockholder; |
• | any sale, transfer, pledge, or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; |
• | subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
• | any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or |
• | the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges, or other financial benefits by or through the corporation. |
• | The accompanying notes to the unaudited pro forma condensed combined financial information; |
• | The separate unaudited condensed consolidated financial statements of Unity as of and for the three months ended March 31, 2022 and the related notes, included in Unity’s Quarterly Report on Form 10-Q for the three months ended March 31, 2022, incorporated by reference into this joint proxy statement and prospectus; |
• | The separate audited consolidated financial statements of Unity as of and for the year ended December 31, 2021 and the related notes, included in Unity’s Annual Report on Form 10-K for the year ended December 31, 2021, incorporated by reference into this joint proxy statement and prospectus; |
• | The separate unaudited condensed consolidated financial information of ironSource as of and for the three months ended March 31, 2022, included in Exhibit 99.1 furnished as part of ironSource’s Report on Form 6-K for the three months ended March 31, 2022, which financial tables included therein are incorporated by reference into this joint proxy statement/prospectus; |
• | The separate audited consolidated financial statements of ironSource as of and for the year ended December 31, 2021 and the related notes, included in ironSource’s Annual Report on Form 20-F for the year ended December 31, 2021, incorporated by reference into this joint proxy statement and prospectus. |
| | Historical | | | Reclassification Adjustments (Note 2) | | | Transaction Accounting Adjustments (Note 4) | | | Note | | | Pro Forma Combined | ||||
| | Unity | | | ironSource | | ||||||||||||
Assets | | | | | | | | | | | | | ||||||
Current assets: | | | | | | | | | | | | | ||||||
Cash and cash equivalents | | | 1,152,014 | | | 441,225 | | | — | | | — | | | | | 1,593,239 | |
Marketable securities | | | 656,581 | | | — | | | — | | | — | | | | | 656,581 | |
Accounts receivable, net of allowances | | | 332,958 | | | 267,603 | | | — | | | (4,871) | | | 4(I) | | | 595,690 |
Prepaid expenses | | | 48,734 | | | — | | | 10,237 | | | — | | | | | 58,971 | |
Other current assets | | | 33,910 | | | 59,472 | | | (10,237) | | | (10,749) | | | 4(E) | | | 72,396 |
Total current assets | | | 2,224,197 | | | 768,300 | | | — | | | (15,620) | | | | | 2,976,877 | |
Property and equipment, net | | | 110,170 | | | 28,272 | | | — | | | (21,002) | | | 4(F) | | | 117,440 |
Operating lease right-of-use assets | | | 101,486 | | | 36,292 | | | | | | | | | 137,778 | |||
Goodwill | | | 1,657,817 | | | 456,354 | | | — | | | 1,996,707 | | | 4(A) | | | 4,110,878 |
Intangible assets, net | | | 789,144 | | | 197,727 | | | — | | | 1,212,142 | | | 4(B) | | | 2,199,013 |
Restricted cash | | | 10,678 | | | 3,435 | | | — | | | | | | | 14,113 | ||
Deferred tax assets | | | — | | | 6,262 | | | (6,262) | | | — | | | | | — | |
Investment in equity securities | | | — | | | 20,000 | | | (20,000) | | | — | | | | | — | |
Other non-current assets | | | 53,168 | | | 35,479 | | | 26,262 | | | (32,360) | | | 4(C), 4(E) | | | 82,549 |
Total assets | | | 4,946,660 | | | 1,552,121 | | | — | | | 3,139,867 | | | | | 9,638,648 | |
| | | | | | | | | | | | |||||||
Liabilities and stockholders’ equity | | | | | | | | | | | | | ||||||
Current liabilities: | | | | | | | | | | | | | ||||||
Accounts payable | | | 13,005 | | | 284,689 | | | (268,788) | | | (4,871) | | | 4(I) | | | 24,035 |
Accrued expenses and other current liabilities | | | 121,976 | | | 67,989 | | | (17,958) | | | 69,339 | | | 4(D) | | | 241,346 |
Publisher payables | | | 213,857 | | | — | | | 268,788 | | | | | | | 482,645 | ||
Income and other taxes payable | | | 54,740 | | | — | | | 15,998 | | | | | | | 70,738 | ||
Deferred revenue | | | 200,218 | | | — | | | 1,960 | | | | | | | 202,178 | ||
Operating lease liabilities | | | 26,464 | | | 10,082 | | | | | — | | | | | 36,546 | ||
Total current liabilities | | | 630,260 | | | 362,760 | | | — | | | 64,468 | | | | | 1,057,488 | |
Convertible notes | | | 1,704,145 | | | — | | | | | | | | | 1,704,145 | |||
Deferred tax liabilities | | | — | | | 11,335 | | | 5,836 | | | 143,419 | | | 4(C) | | | 160,590 |
Long-term deferred revenue | | | 145,676 | | | — | | | — | | | — | | | | | 145,676 | |
Long-term operating lease liabilities | | | 94,340 | | | 30,296 | | | | | — | | | | | 124,636 | ||
Other long-term liabilities | | | 10,097 | | | 2,375 | | | (5,836) | | | | | | | 6,636 | ||
Total liabilities | | | 2,584,518 | | | 406,766 | | | — | | | 207,887 | | | | | 3,199,171 | |
| | | | | | | | | | | | |||||||
Stockholders’ equity: | | | | | | | | | | | | | ||||||
Common stock | | | 2 | | | — | | | — | | | 21 | | | 4(G) | | | 23 |
Treasury shares, at cost | | | — | | | (67,460) | | | — | | | 67,460 | | | 4(G) | | | — |
Additional paid-in capital | | | 3,879,589 | | | 1,071,566 | | | — | | | 3,075,087 | | | 4(G) | | | 8,026,242 |
Accumulated other comprehensive income (loss) | | | (8,267) | | | 533 | | | — | | | (533) | | | 4(G) | | | (8,267) |
Retained earnings (accumulated deficit) | | | (1,509,182) | | | 140,716 | | | — | | | (210,055) | | | 4(H) | | | (1,578,521) |
Total stockholders’ equity | | | 2,362,142 | | | 1,145,355 | | | — | | | 2,931,980 | | | | | 6,439,477 | |
| | | | | | | | | | | | |||||||
Total liabilities and stockholders’ equity | | | 4,946,660 | | | 1,552,121 | | | — | | | 3,139,867 | | | | | 9,638,648 |
| | Historical three months ended | | | Transaction Accounting Adjustments (Note 5) | | | Note | | | Pro Forma Combined | ||||
| | Unity | | | ironSource | | |||||||||
Revenue | | | 320,126 | | | 189,665 | | | 69 | | | 5(A) | | | 509,860 |
Cost of revenue | | | (93,833) | | | (40,087) | | | (10,356) | | | 5(B) | | | (144,276) |
Gross profit | | | 226,293 | | | 149,578 | | | (10,287) | | | | | 365,584 | |
Operating expenses | | | | | | | | | | | |||||
Research and development | | | (221,040) | | | (34,656) | | | 3,707 | | | 5(C) | | | (251,989) |
Sales and marketing | | | (103,939) | | | (75,289) | | | (22,037) | | | 5(D) | | | (201,265) |
General and administrative | | | (72,475) | | | (22,847) | | | 3,024 | | | 5(E) | | | (92,298) |
Total operating expenses | | | (397,454) | | | (132,792) | | | (15,306) | | | | | (545,552) | |
Income (loss) from operations | | | (171,161) | | | 16,786 | | | (25,593) | | | | | (179,968) | |
Interest expense | | | (1,111) | | | — | | | — | | | | | (1,111) | |
Interest income and other expense, net | | | 941 | | | (346) | | | — | | | | | 595 | |
Income (loss) before benefit from (provision for) income taxes | | | (171,331) | | | 16,440 | | | (25,593) | | | | | (180,484) | |
Benefit from (provision for) income taxes | | | (6,224) | | | (2,668) | | | 3,258 | | | 5(F) | | | (5,634) |
Net income (loss) | | | (177,555) | | | 13,772 | | | (22,335) | | | | | (186,118) | |
Other comprehensive income (loss), net of taxes | | | | | | | | | | | |||||
Change in foreign currency translation adjustments | | | 19 | | | — | | | — | | | | | 19 | |
Change in unrealized gains on derivatives designated as cash flow hedge | | | — | | | 38 | | | — | | | | | 38 | |
Change in unrealized losses on marketable securities | | | (4,428) | | | — | | | — | | | | | (4,428) | |
Comprehensive income | | | (181,964) | | | 13,810 | | | (22,535) | | | | | (190,489) | |
| | | | | | | | | | ||||||
Basic net income (loss) per share | | | (0.60) | | | 0.01 | | | | | | | (0.46) | ||
Weighted average shares outstanding - basic | | | 294,341 | | | 1,018,117 | | | 111,531 | | | | | 405,872 | |
Diluted net income (loss) per share | | | (0.60) | | | 0.01 | | | | | | | (0.46) | ||
Weighted average shares outstanding - diluted | | | 294,341 | | | 1,084,683 | | | 111,531 | | | | | 405,872 |
| | Historical year ended | | | Transaction Accounting Adjustments (Note 5) | | | Note | | | Pro Forma Combined | ||||
| | Unity | | | ironSource | | |||||||||
Revenue | | | 1,110,526 | | | 553,466 | | | (3,560) | | | 5(A) | | | 1,660,432 |
Cost of revenue | | | (253,630) | | | (89,223) | | | (66,909) | | | 5(B) | | | (409,762) |
Gross profit | | | 856,896 | | | 464,243 | | | (70,469) | | | | | 1,250,670 | |
Operating expenses: | | | | | | | | | | | |||||
Research and development | | | (695,710) | | | (90,531) | | | 8,184 | | | 5(C) | | | (778,057) |
Sales and marketing | | | (344,939) | | | (208,707) | | | (99,903) | | | 5(D) | | | (653,549) |
General and administrative | | | (347,912) | | | (82,638) | | | (57,251) | | | 5(E) | | | (487,801) |
Total operating expenses | | | (1,388,561) | | | (381,876) | | | (148,970) | | | | | (1,919,407) | |
Income (loss) from operations | | | (531,665) | | | 82,367 | | | (219,439) | | | | | (668,737) | |
Interest expense | | | (1,131) | | | — | | | — | | | | | (1,131) | |
Interest income and other expense, net | | | 1,566 | | | (2,004) | | | | | | | (438) | ||
Income (loss) before benefit from (provision for) income taxes | | | (531,230) | | | 80,363 | | | (219,439) | | | | | (670,306) | |
Benefit from (provision for) income taxes | | | (1,377) | | | (20,542) | | | 18,651 | | | 5(F) | | | (3,268) |
Net income (loss) | | | (532,607) | | | 59,821 | | | (200,788) | | | | | (673,574) | |
Other comprehensive income (loss), net of taxes | | | | | | | | | | | |||||
Change in foreign currency translation adjustments | | | 583 | | | — | | | — | | | | | 583 | |
Change in unrealized gains on derivatives designated as cash flow hedge | | | — | | | 495 | | | — | | | | | 495 | |
Change in unrealized losses on marketable securities | | | (1,023) | | | — | | | — | | | | | (1,023) | |
Comprehensive income | | | (533,047) | | | 60,316 | | | (200,788) | | | | | (673,519) | |
Basic net income (loss) per share | | | (1.89) | | | 0.07 | | | | | | | (1.71) | ||
Weighted average shares outstanding - basic | | | 282,195 | | | 832,144 | | | 111,477 | | | | | 393,672 | |
Diluted net income (loss) per share | | | (1.89) | | | 0.06 | | | | | | | (1.71) | ||
Weighted average shares outstanding - diluted | | | 282,195 | | | 911,059 | | | 111,477 | | | | | 393,672 |
1. | Basis of Presentation |
2. | Reclassification Adjustments |
3. | Calculation of Estimated Merger Consideration and Preliminary Purchase Price Allocation |
| | (In thousands, except per share amounts) | |||||||
Estimated consideration for Unity common stock issued to ironSource shareholders(1) | | | | | | | $3,959,935 | ||
Estimated consideration for replacement of ironSource’s outstanding equity awards(2) | | | | | | | $186,739 | ||
Total preliminary estimated merger consideration | | | | | | | $4,146,674 |
(1) | The consideration component of the estimated merger consideration is computed based on the total outstanding ironSource ordinary shares as of July 25, 2022, multiplied by the Exchange Ratio of 0.1089 and the closing price of Unity common stock on the NYSE on July 25, 2022 of $35.54. |
(in thousands, except exchange ratio and share price) | | | |
ironSource ordinary shares outstanding as of July 25, 2022 | | | 1,023,158 |
Exchange ratio | | | 0.1089 |
Unity stock to be issued in exchange | | | 111,422 |
Unity stock price as of July 25, 2022 | | | $35.54 |
Estimated consideration | | | $3,959,935 |
(2) | Estimated consideration for ironSource’s outstanding RSUs, and options (“equity awards”) to pre-combination service. ironSource’s outstanding equity awards for continuing employees will be replaced by Unity’s equity awards with similar terms. A portion of the fair value of Unity’s equity awards and options issued represents consideration transferred. The final value will be impacted by changes in the price of Unity common stock and the number of ironSource’s equity awards outstanding at the actual date of the closing of the merger. |
| | Stock price | | | Consideration | | | Goodwill | |
| | (In thousands, except per share amounts) | |||||||
Increase of 10% | | | $39.09 | | | $4,561,341 | | | $2,867,729 |
Decrease of 10% | | | $31.99 | | | $3,732,006 | | | $2,038,394 |
| | Preliminary Fair Value | | | Estimated useful life | |
| | (in thousands) | | | (in years) | |
Developed technology | | | 829,335 | | | 10.0 |
Customer relationships | | | 518,334 | | | 5.0 |
Trademark | | | 62,200 | | | 5.0 |
Total | | | 1,409,869 | | |
4. | Transaction Accounting Adjustments for Condensed Combined Balance Sheet |
| | (in thousands) | |
Elimination of ironSource’s incentive payments to customers from other current asset | | | (10,749) |
Elimination of ironSource’s incentive payments to customers from other noncurrent asset | | | (26,098) |
(in thousand) | | | Common Stock | | | Additional paid-in capital | | | Accumulated other comprehensive income | | | Treasury Shares |
Elimination of historical ironSource shareholders’ equity | | | — | | | (1,071,566) | | | (533) | | | 67,460 |
Estimated equity awards for ironSource’s equity awards attributable to pre-combination service | | | — | | | 186,739 | | | — | | | — |
Estimated merger consideration | | | 21 | | | 3,959,914 | | | — | | | — |
Pro forma net adjustment to stockholders’ equity | | | 21 | | | 3,075,087 | | | (533) | | | 67,460 |
| | (in thousands) | |
Elimination of ironSource’s retained earnings | | | (140,716) |
Accrual of Unity and ironSource’s transaction related cost | | | (69,339) |
Pro forma net adjustment to retained earnings | | | (210,055) |
| | Three months ended March 31, 2022 | | | Year ended December 31, 2021 | |
| | (in thousands) | ||||
Elimination of Unity's historical revenue earned from ironSource for user acquisition | | | (1,485) | | | (8,893) |
Elimination of amortization of ironSource’s incentive payments to customers, which is assumed in the customer relationship intangible asset as a result of the merger | | | 1,554 | | | 5,333 |
Pro forma net adjustment to revenue | | | 69 | | | (3,560) |
| | Three months ended March 31, 2022 | | | Year ended December 31, 2021 | |
| | (in thousands) | ||||
Elimination of ironSource’s historical amortization on intangible assets and capitalized internal use software | | | 9,891 | | | 15,616 |
Elimination of ironSource’s historical stock-based compensation expense | | | 480 | | | 1,217 |
Amortization of acquired intangible assets | | | (20,449) | | | (82,933) |
Stock-based compensation expense after equity award replacement | | | (278) | | | (809) |
Pro forma net adjustment to cost of revenue | | | (10,356) | | | (66,909) |
| | Three months ended March 31, 2022 | | | Year ended December 31, 2021 | |
| | (in thousands) | ||||
Elimination of ironSource’s historical stock-based compensation expense | | | 8,803 | | | 24,419 |
Stock-based compensation expense after equity award replacement | | | (5,096) | | | (16,235) |
Pro forma net adjustment to research and development expenses | | | 3,707 | | | 8,184 |
| | Three months ended March 31, 2022 | | | Year ended December 31, 2021 | |
| | (in thousands) | ||||
Amortization of acquired intangible assets | | | (28,629) | | | (116,107) |
Elimination of ironSource’s historical amortization on intangible assets | | | 1,771 | | | 1,678 |
Elimination of ironSource’s historical stock-based compensation expense | | | 7,922 | | | 16,807 |
Stock-based compensation expense after equity award replacement | | | (4,586) | | | (11,174) |
Elimination of ironSource's historical expense incurred from Unity for user acquisition | | | 1,485 | | | 8,893 |
Pro forma net adjustment to sales and marketing expenses | | | (22,037) | | | (99,903) |
| | Three months ended March 31, 2022 | | | Year ended December 31, 2021 | |
| | (in thousands) | ||||
Elimination of ironSource’s historical stock-based compensation expense | | | 7,181 | | | 36,071 |
Stock-based compensation expense after equity award replacement | | | (4,157) | | | (23,983) |
Transaction cost - Unity and ironSource | | | — | | | (69,339) |
Pro forma net adjustment to general and administrative expenses | | | 3,024 | | | (57,251) |
| | Three months ended March 31, 2022 | | | Year ended December 31, 2021 | |
| | (in thousands) | ||||
Preliminary purchase price adjustment - amortization | | | 4,490 | | | 21,809 |
Tax impact due to adjustments of share-based compensation expense | | | (1,232) | | | (3,158) |
Pro forma net adjustment to tax provision | | | 3,258 | | | 18,651 |
| | Three months ended March 31, 2022 | | | Year ended December 31, 2021 | |
| | (in thousands) | ||||
Numerator | | | | | ||
Pro forma net loss | | | (186,118) | | | (673,574) |
Pro forma net loss attributable to common stockholders, basis and diluted | | | (186,118) | | | (673,574) |
| | | | |||
Denominator | | | | | ||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | | | 405,872 | | | 393,672 |
Net loss per share attributable to common stockholders, basic | | | (0.46) | | | (1.71) |
Net loss per share attributable to common stockholders, diluted | | | (0.46) | | | (1.71) |
Unity | | | ironSource |
Capital Stock | |||
| | ||
Under the Unity charter, Unity is authorized to issue an aggregate of 1,100,000,000 shares of capital stock, consisting of: (1) 1,000,000,000 shares of common stock, $0.000005 par value per share, and (2) 100,000,000 shares of preferred stock, $0.000005 par value per share. | | | ironSource’s authorized capital consists of 10,000,000,000 Class A ordinary shares, no par value, and 1,500,000,000 Class B ordinary shares, no par value. |
| | ||
As of July 15, 2022, there were 298,106,454 shares of Unity common stock outstanding and no shares of Unity preferred stock outstanding. | | | As of July 15, 2022, there were 1,023,158,214 ordinary shares of ironSource outstanding and no preferred shares of ironSource outstanding. |
| | ||
Voting | |||
| | ||
Each holder of Unity common stock is entitled to one vote for each share held on every matter properly submitted to the stockholders for their vote. Holders of Unity common stock do not have cumulative voting rights. | | | Each ironSource Class A ordinary share is entitled to one vote per share. Each ironSource Class B ordinary share is entitled to five votes per share. Holders of the ironSource Class A ordinary shares and Class B ordinary shares will vote together as a single class on all matters (including the election of directors) submitted to a vote of shareholders except as otherwise provided in our amended and restated articles of association or as required by applicable law. Under the ironSource articles of association and the Companies Law, the holders of ironSource Class B ordinary shares will only vote as a separate class under certain circumstances, including: • on a proposal to convert the entire class of those shares into Class A ordinary shares on a one-for-one basis, which requires the affirmative vote of the holders of at least 65% of the outstanding Class B ordinary shares for approval; • amendment of the rights of the Class B ordinary shares; |
Unity | | | ironSource |
exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Any person or entity holding, owning or otherwise acquiring interest in Unity, including Unity common stock, is deemed to have received notice of and consented to the foregoing forum selection clause, which could limit Unity stockholders’ ability to choose the judicial forum for disputes with Unity. The enforceability of similar choice of forum provisions in other companies’ charters and bylaws has been challenged in legal proceedings, and it is possible that, in connection with claims arising under federal securities laws, a court could find the choice of forum provisions contained in the Unity charter to be inapplicable or unenforceable. | | |
• | each person known by ironSource who is the beneficial owner of 5% or more of the outstanding ironSource Class A ordinary shares or ironSource Class B ordinary shares; |
• | each of ironSource’s executive officers and directors individually; and |
• | all of ironSource’s executive officers and directors as a group. |
| | ironSource Class A Ordinary Shares | | | ironSource Class B Ordinary Shares | | | Combined Voting Power Percentage(3) | |||||||
Name of Beneficial Owner(1) | | | Number | | | Percent(2) | | | Number | | | Percent(2) | | ||
Directors and Executive Officers: | | | | | | | | | | | |||||
Tomer Bar-Zeev(4) | | | 30,805,662 | | | 4.5% | | | 30,805,662 | | | 8.9% | | | 7.7% |
Orlando Bravo | | | * | | | * | | | * | | | * | | | * |
Assaf Ben Ami | | | * | | | * | | | * | | | * | | | * |
Tamir Carmi(5) | | | 12,682,409 | | | 1.9% | | | 12,682,409 | | | 3.7% | | | 3.2% |
Shlomo Dovrat(6) | | | 36,710,809 | | | 5.4% | | | 36,710,809 | | | 10.7% | | | 9.2% |
Arnon Harish(7) | | | 13,253,072 | | | 1.9% | | | 13,253,072 | | | 3.8% | | | 3.3% |
Omer Kaplan | | | * | | | * | | | * | | | * | | | * |
David Kostman | | | * | | | * | | | * | | | * | | | * |
Dalia Litay | | | * | | | * | | | * | | | * | | | * |
Eyal Milrad(8) | | | 30,181,081 | | | 4.4% | | | 30,181,081 | | | 8.8% | | | 7.5% |
Yehoshua (Shuki) Nir | | | * | | | * | | | * | | | * | | | * |
Tal Payne | | | * | | | * | | | * | | | * | | | * |
Daniel Pindur | | | * | | | * | | | * | | | * | | | * |
Marni Walden | | | * | | | * | | | * | | | * | | | * |
All executive officers and directors as a group (14 persons)(9) | | | 140,535,377 | | | 20.4% | | | 128,998,620 | | | 36.5% | | | 32.0% |
| | ironSource Class A Ordinary Shares | | | ironSource Class B Ordinary Shares | | | Combined Voting Power Percentage(3) | |||||||
Name of Beneficial Owner(1) | | | Number | | | Percent(2) | | | Number | | | Percent(2) | | ||
Principal Shareholders: | | | | | | | | | | | |||||
App Investments Sárl(10) | | | 124,888,405 | | | 18.4% | | | 124,888,405 | | | 36.4% | | | 31.3% |
Viola Ventures, III L.P.(11) | | | 36,710,809 | | | 5.4% | | | 36,710,809 | | | 10.7% | | | 9.2% |
Itay Milrad(12) | | | 29,556,500 | | | 4.3% | | | 29,556,500 | | | 8.6% | | | 7.4% |
Roi Milrad(13) | | | 29,556,500 | | | 4.3% | | | 29,556,500 | | | 8.6% | | | 7.4% |
* | Less than one percent (1%) of ironSource’s outstanding Class A ordinary shares, Class B ordinary shares or combined voting power, as applicable. |
(1) | Except as otherwise indicated, and subject to applicable community property laws, ironSource believes based on the information provided to us that the persons named in the table have sole voting and investment power with respect to all ironSource Class A ordinary shares and ironSource Class B ordinary shares beneficially owned by them. |
(2) | Percentages of outstanding shares are based on 679,794,571 ironSource Class A ordinary shares (which excludes 6,745,955 ironSource Class A ordinary shares held by TBA that are deemed treasury shares) and 343,363,643 ironSource Class B ordinary shares, respectively, issued and outstanding as of July 15, 2022. |
(3) | Because the ironSource Class B ordinary shares possess five votes per share, whereas ironSource Class A ordinary shares possess only one vote per share, but both classes of shares vote together on matters presented to our shareholders as a whole, we have provided the percentage of combined voting power for each shareholder listed in the table. |
(4) | Based on a Schedule 13G filed by the shareholder with the SEC on February 14, 2022 and based on information known to us, includes 1,738,345 ironSource Class A ordinary shares and 1,738,345 ironSource Class B ordinary shares that in each case underlie options that are vested on, or will vest within 60 days of, July 15, 2022. |
(5) | The beneficial ownership of this executive officer includes 1,875,721 ironSource Class A ordinary shares and 1,875,721 ironSource Class B ordinary shares that in each case underlie options that are vested on, or will vest within 60 days of, July 15, 2022. |
(6) | The 36,710,809 ironSource Class A ordinary shares and 36,710,809 ironSource Class B ordinary shares reported in this row are held by Viola Ventures, III L.P. Mr. Dovrat may be deemed to share voting and dispositive power with respect to these shares by virtue of his serving as a director of the sole general partner of Viola Ventures, III L.P. Mr. Dovrat disclaims beneficial ownership over these shares except to the extent of his pecuniary interest therein. |
(7) | The beneficial ownership of this executive officer includes 1,881,916 ironSource Class A ordinary shares and 1,881,916 ironSource Class B ordinary shares that in each case underlie options that are vested on, or will vest within 60 days of, July 15, 2022. |
(8) | Based on a Schedule 13G filed by the shareholder with the SEC on February 14, 2022 and based on information known to us, includes 869,172 ironSource Class A ordinary shares and 869,172 ironSource Class B ordinary shares that in each case underlie options that are vested on, or will vest within 60 days of, July 15, 2022. |
(9) | Comprised of (i) 130,722,630 ironSource Class A ordinary shares and 119,185,873 ironSource Class B ordinary shares, in the aggregate, held by executive officers and directors, and (ii) an additional 9,812,747 ironSource Class A ordinary shares and 9,812,747 ironSource Class B ordinary shares, in the aggregate, underlying options held by executive officers and directors that have vested or that will vest within 60 days of July 15, 2022. Please see footnotes (4) through (8) above for details concerning the beneficial ownership of those individual executive officers and directors who beneficially own more than one percent (1%) of the ironSource ordinary shares. |
(10) | The beneficial ownership presented for this shareholder is based on information available to us. The shares reported in this row are held by App Investments S.a´.r.l. (“App Investments”). The majority owner of App Investments is App Holdings S.a´.r.l., which is wholly owned by Appsource Holdings Jersey Limited, which is wholly owned by CVC Capital Partners VII Associates L.P., CVC Capital Partners Investment Europe VII L.P., CVC Capital Partners VII (A), L.P. (together, “CVC Fund VII”), CVC Growth Partners Associates L.P. and CVC Growth Partners L.P. (together, “CVC Growth Fund I”). CVC Capital Partners VII Limited is the sole general partner of each of the limited partnerships comprising CVC Fund VII, and CVC Growth Partners GP Limited is the general partner of each of the limited partnerships comprising CVC Growth Fund I. As a result, each of the foregoing entities may be deemed to share beneficial ownership of the securities held by App Investments. The board of directors of App Investments, composed of Stefan Moosmann, Carmen Andre´ and Thomas Morana, exercises voting and investment authority with respect to the subject ordinary shares. CVC Capital Partners VII Limited is managed by a six member board of directors. CVC Growth Partners GP Limited is managed by a four member board of directors. Each of the foregoing individuals disclaims beneficial ownership of the securities beneficially owned by CVC Capital Partners VII Limited and CVC Growth Partners GP Limited. CVC Capital Partners VII Limited and CVC Growth Partners GP Limited each have their registered address at 27 Esplanade, St Helier, Jersey JE1 1SG. |
(11) | Beneficial ownership information for this shareholder is based on a Schedule 13G filed by the shareholder with the SEC on February 14, 2022. This shares reported in this line are held by Viola Ventures III, L.P. (“Viola Ventures III”). Viola Ventures GP 3 Ltd. serves as the sole general partner of Viola Ventures III. Shlomo Dovrat, Harel Beit-On and Avi Zeevi are the directors of Viola Ventures GP 3 Ltd. and in such capacity possess the voting power and dispositive power on behalf of Viola Ventures III with respect to these shares. The address for these Viola entities is 12 Abba Eban Avenue Ackerstein Towers Bldg. D Herzliya 4672530 Israel. |
(12) | Beneficial ownership information for this shareholder is based on a Schedule 13G filed by the shareholder with the SEC on February 14, 2022. |
(13) | Beneficial ownership information for this shareholder is based on a Schedule 13G filed by the shareholder with the SEC on February 14, 2022. |
• | Unity’s Annual Report on Form 10-K for the year ended December 31, 2021; |
• | the information specifically incorporated by reference into the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 from Unity’s definitive proxy statement on Schedule 14A filed on April 20, 2022; |
• | Unity’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022; |
• | Unity’s Current Reports on Form 8-K filed on March 22, 2022, June 6, 2022, July 13, 2022 and July 15, 2022; and |
• | any description of shares of Unity common stock contained in a registration statement on Form 8-A filed pursuant to the Exchange Act and any amendment or report filed for the purpose of updating such description. |
• | ironSource’s Annual Report on Form 20-F for the year ended December 31, 2021; |
• | Exhibit 99.1 furnished as part of ironSource’s Current Report on Form 6-K filed on May 12, 2022 (solely with respect to the financial tables included therein); |
• | ironSource’s Current Reports on Form 6-K filed on July 13, 2022, July 15, 2022 and July 27, 2022; and |
• | any description of shares of ironSource ordinary shares contained in a registration statement filed on Form 8-A pursuant to the Exchange Act and any amendment or report filed for the purpose of updating such description. |
For Unity Stockholders: Unity Software Inc. 30 3rd Street San Francisco, California 94103 Attention: Corporate Secretary Telephone: (415) 539-3162 | | | For ironSource Shareholders: ironSource Ltd. 121 Menachem Begin Street Tel Aviv 6701203, Israel Attention: Investor Relations Telephone: +972-74-799-0001 |
| | | | | | Page | |||
| | ||||||||
| | | | | |||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
|
| | | | | | Page | |||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | |
| | | | | | Page | |||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | |
| | | | |||
| | | | |||
| | | | |||
| | | |
| | Unity Software Inc. | |
| | 30 3rd Street | |
| | San Francisco, CA 94103-3104 | |
| | Email: Unity M&A legal team | |
| | Attention: malegal@unity.com |
| | ironSource Ltd. | |
| | 121 Menachem Begin Street | |
| | Tel -Aviv, Israel 6701203 | |
| | Email: legal@is.com | |
| | Attention: Dalia Litay, GC |
| | UNITY SOFTWARE INC. | ||||
| | |||||
| | By | | | /s/ Luis Visoso | |
| | Name: | | | Luis Visoso | |
| | Title: | | | Senior Vice President and Chief Financial Officer |
| | URSA AROMA MERGER SUBSIDIARY LTD. | ||||
| | |||||
| | By | | | /s/ Luis Visoso | |
| | Name: | | | Luis Visoso | |
| | Title: | | | Senior Vice President and | |
| | | | Chief Financial Officer |
| | IRONSOURCE LTD. | ||||
| | |||||
| | By | | | /s/ Assaf Ben Ami | |
| | Name: | | | Assaf Ben Ami | |
| | Title: | | | CFO |
Term | | | Section |
102 Tax Ruling | | | Section 6.19(b) |
103K Tax Ruling | | | Section 6.19(a) |
104H Tax Ruling | | | Section 6.19(c) |
401(k) Termination Date | | | Section 6.7(c) |
Academic Institutions | | | Section 3.14(j) |
Agreement | | | Preamble |
Alternative ISA Approvals | | | Section 6.18(c) |
Base Amount | | | Section 6.4(c) |
Book-Entry Share | | | Section 2.1(a)(i) |
Cancelled Shares | | | Section 2.1(a)(ii) |
Certificate | | | Section 2.1(a)(i) |
Certificate of Merger | | | Section 1.4 |
Closing | | | Section 1.3 |
Closing Date | | | Section 1.3 |
Collective Bargaining Agreement | | | Section 3.11(a) |
Companies Registrar | | | Section 1.4 |
Company | | | Preamble |
Company Acquisition Agreement | | | Section 5.3(a) |
Company Benefit Plan | | | Section 3.10(a) |
Company Board of Directors | | | Recitals |
Company Board Recommendation | | | Recitals |
Company Capitalization Date | | | Section 3.2(a) |
Company Change of Recommendation | | | Section 5.3(a) |
Company Class A Shares | | | Recitals |
Company Class B Shares | | | Recitals |
Company Disclosure Letter | | | Article III |
Company Expenses | | | Section 8.2(d) |
Company Leases | | | Section 3.16 |
Company Ordinary Shares | | | Recitals |
Company Outstanding Confidentiality Agreements | | | Section 5.3(a) |
Company Permits | | | Section 3.9(b) |
Company SEC Documents | | | Section 3.5(a) |
Company Shareholder Approval | | | Section 3.3(b) |
Company Shareholder Voting Agreement | | | Recitals |
Company Shareholders Meeting | | | Section 5.5(e) |
Company Shareholders | | | Recitals |
Company Termination Fee | | | Section 8.2(b)(i) |
Term | | | Section |
Continuing Employees | | | Section 6.7(a) |
Continuing Service Provider | | | Section 2.3(a)(i) |
Converted Parent RSU | | | Section 2.3(b)(i) |
Converted Parent Stock Option | | | Section 2.3(a)(i) |
Databases | | | Annex A |
DOJ | | | Section 6.2(b) |
Domain Names | | | Annex A |
Dual Listing Permit | | | Section 6.18(a) |
Effective Time | | | Section 1.4 |
Enforceability Limitations | | | Section 3.3(d) |
Exchange Agent | | | Section 2.2(a) |
Exchange Agent Undertaking | | | Section 2.4(b) |
Exchange Fund | | | Section 2.2(a) |
Exchange Ratio | | | Section 2.1(a)(i) |
Export Approvals | | | Section 3.9(f) |
FCPA | | | Annex A |
FTC | | | Section 6.2(b) |
GAAP | | | Section 3.5(b) |
ICL | | | Recitals |
Indemnified Parties | | | Section 6.4(a) |
Intended U.S. Tax Treatment | | | Preamble |
ISA | | | Section 6.18(a) |
Joint Proxy Statement | | | Section 5.5(b) |
Merger | | | Recitals |
Material Contracts | | | Section 3.17(a) |
Material Customer | | | Section 3.19(a) |
Material Customer Agreement | | | Section 3.19(a) |
Material Partner | | | Section 3.19(c) |
Material Partner Agreement | | | Section 3.19(c) |
Material Vendor | | | Section 3.19(b) |
Material Vendor Agreement | | | Section 3.19(b) |
Merger Consideration | | | Section 2.1(a)(i) |
Merger Proposal Submission Date | | | Section 6.17(a)(i) |
Merger Proposal | | | Section 6.17(a)(i) |
Merger Sub | | | Preamble |
Merger Sub Shares | | | Section 2.1(a)(iii) |
New Plans | | | Section 6.7(b) |
Non-Continuing Service Provider | | | Section 2.3(a)(ii) |
OFAC | | | Annex A |
Old Plans | | | Section 6.7(b) |
Outside Date | | | Section 8.1(b)(ii) |
Parent | | | Preamble |
Parent Acquisition Agreement | | | Section 5.4(a) |
Parent Board of Directors | | | Recitals |
Parent Board Recommendation | | | Recitals |
Parent Change of Recommendation | | | Section 5.4(a) |
Parent Common Stock | | | Recitals |
Parent Common Stock Issuance | | | Recitals |
Parent Disclosure Letter | | | Article IV |
Parent Expenses | | | Section 8.2(c) |
Term | | | Section |
Parent Outstanding Confidentiality Agreements | | | Section 5.4(a) |
Parent Stockholder Voting Agreement | | | Recitals |
Parent Stockholders Meeting | | | Section 5.5(f) |
Parent Termination Fee | | | Section 8.2(b)(v) |
Parties | | | Preamble |
Party | | | Preamble |
Payoff Letter | | | Section 6.13 |
Payor | | | Section 2.4(a) |
Registration Statement | | | Section 5.5(b) |
Sanctioned Countries | | | Section 3.9(g) |
Sanctioned Persons | | | Section 3.9(g) |
Sanctions | | | Annex A |
Sarbanes-Oxley Act | | | Section 3.5(a) |
Section 102 Plan | | | Section 3.12(l) |
Surviving Company | | | Recitals |
Takeover Statute | | | Section 3.23 |
TASE | | | Section 6.18(a) |
Tax Rulings | | | Section 6.19(c)(ii) |
Transactions | | | Recitals |
Valid Tax Certificate | | | Section 2.4(b) |
VAT | | | Section 3.12(q) |
Withholding Drop Date | | | Section 2.4(b) |
Withholding Tax Ruling | | | Section 6.19(c)(ii) |
| | UNITY SOFTWARE INC. | ||||
| | | | |||
| | By: | | | ||
| | Name: | | | ||
| | Title: | | |||
| | | | |||
| | [•] | | | ||
| | | | |||
| | By: | | | ||
| | Name: | | | ||
| | Address: | | | ||
| | E-mail: | | |
Name of Shareholder | | | Number of Class A Ordinary Shares | | | Number of Class B Ordinary Shares |
[•] | | | [•] | | | [•] |
• | In connection with a vote at a meeting in which Class A Ordinary Shares and Class B Ordinary Shares are voting together as a single class: |
Name of Shareholder | | | Number of Class A Ordinary Shares | | | Number of Class B Ordinary Shares |
[•] | | | [•] | | | [•] |
• | In connection with a vote at a meeting of Class A Ordinary Shares: |
Name of Shareholder | | | Number of Class A Ordinary Shares |
[•] | | | [•] |
• | In connection with a vote at a meeting of Class B Ordinary Shares: |
Name of Shareholder | | | Number of Class B Ordinary Shares |
[•] | | | [•] |
| | IRONSOURCE LTD. | ||||
| | | | |||
| | By: | | | ||
| | Name: | | | ||
| | Title: | | | ||
| | | | |||
| | [•] | | | ||
| | | | |||
| | By: | | | ||
| | Name: | | | ||
| | Address: | | | ||
| | E-mail: | | |
| | Page | |||||||
| | ||||||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | |
| | 2725 Sand Hill Road Suite 200 Menlo Park, CA 94025 July 12, 2022 |
1) | Reviewed certain publicly available financial statements and other business and financial information of the Company and the Buyer, respectively; |
2) | Reviewed certain internal financial statements and other financial and operating data concerning the Company and the Buyer, respectively; |
3) | Reviewed certain financial projections of the Company prepared by the management of the Company; |
4) | Reviewed certain financial projections of the Buyer prepared by the management of the Buyer; |
5) | Reviewed information relating to certain strategic, financial and operational benefits anticipated from the Merger, prepared by the management of the Buyer; |
6) | Discussed the past and current operations and financial condition and the prospects of the Buyer, including information relating to certain strategic, financial and operational benefits anticipated from the Merger, with senior executives of the Buyer; |
7) | Discussed the past and current operations and financial condition and the prospects of the Company, including information relating to certain strategic, financial and operational benefits anticipated from the Merger, with senior executives of the Company; |
8) | Reviewed the pro forma impact of the Merger on the Buyer’s cash flow, consolidated capitalization and certain financial ratios; |
9) | Reviewed the reported prices and trading activity for the Company Class A Shares and the Buyer Common Stock; |
10) | Compared the financial performance of the Company and the Buyer and the prices and trading activity of the Company Class A Shares and the Buyer Common Stock with that of certain other publicly traded companies comparable with the Company and the Buyer, respectively, and their securities; |
11) | Participated in certain discussions and negotiations among representatives of the Company and the Buyer and their financial and legal advisors; |
12) | Reviewed the Merger Agreement and certain related documents; and |
13) | Performed such other analyses, reviewed such other information and considered such other factors as we have deemed appropriate. |
| | Very truly yours, | ||||
| | |||||
| | MORGAN STANLEY & CO. LLC | ||||
| | |||||
| | By: | | | /s/ Jeffrey N. Hogan | |
| | | | Jeffrey N. Hogan | ||
| | | | Managing Director |
July 11, 2022 The Board of Directors ironSource Ltd. 121 Menachem Begin Street Tel Aviv 6701203, Israel | | |
(i) | reviewed a draft dated July 8, 2022 of the Merger Agreement; |
(ii) | reviewed certain publicly available financial and other information about ironSource and Unity Software; |
(iii) | reviewed certain information furnished to us and approved for our use by ironSource management and the ironSource Board of Directors, including financial forecasts and analyses, relating to the business, operations and prospects of ironSource prepared by ironSource management (the “ironSource Forecasts”); |
(iv) | reviewed certain information furnished to us and approved for our use by ironSource management and the ironSource Board of Directors, including financial forecasts and analyses, relating to the business, operations and prospects of Unity Software prepared by Unity Software management (the “Unity Software Forecasts”); |
(v) | held discussions with members of senior management of ironSource concerning the matters described in clauses (ii) through (iv) above; |
(vi) | reviewed the share trading price history and valuation multiples for the ironSource Ordinary Shares and the Unity Software Shares and compared them with those of certain publicly traded companies that we deemed relevant; |
(vii) | considered certain potential pro forma financial effects of the Merger on ironSource and Unity Software utilizing the financial forecasts and estimates relating to ironSource and Unity Software referred to above; and |
(viii) | conducted such other financial studies, analyses and investigations as we deemed appropriate. |
| | UNITY SOFTWARE INC. | ||||
| | | | |||
| | By: | | | ||
| | Name: | | | ||
| | Title: | | |||
| | | | |||
| | [•] | | | ||
| | | | |||
| | By: | | | ||
| | Name: | | | ||
| | Address: | | | ||
| | E-mail: | | |
Name of Shareholder | | | Number of Class A Ordinary Shares | | | Number of Class B Ordinary Shares |
[•] | | | [•] | | | [•] |
• | In connection with a vote at a meeting in which Class A Ordinary Shares and Class B Ordinary Shares are voting together as a single class: |
Name of Shareholder | | | Number of Class A Ordinary Shares | | | Number of Class B Ordinary Shares |
[•] | | | [•] | | | [•] |
• | In connection with a vote at a meeting of Class A Ordinary Shares: |
Name of Shareholder | | | Number of Class A Ordinary Shares |
[•] | | | [•] |
• | In connection with a vote at a meeting of Class B Ordinary Shares: |
Name of Shareholder | | | Number of Class B Ordinary Shares |
[•] | | | [•] |
| | IRONSOURCE LTD. | ||||
| | | | |||
| | By: | | | ||
| | Name: | | | ||
| | Title: | | | ||
| | | | |||
| | [•] | | | ||
| | | | |||
| | By: | | | ||
| | Name: | | | ||
| | Address: | | | ||
| | E-mail: | | |
Item 20. | Indemnification of Officers and Directors |
Item 21. | Exhibits |
Item 22. | Undertakings |
| | UNITY SOFTWARE INC. | ||||
| | | | |||
| | By: | | | /s/ John Riccitiello | |
| | | | John Riccitiello | ||
| | | | President and Chief Executive Officer | ||
| | | | (Principal Executive Officer) |
Signature | | | Title | | | Date |
| | | | |||
/s/ John Riccitiello | | | President, Chief Executive Officer, and Executive Chairman of the Board of Directors (Principal Executive Officer) | | | July 29, 2022 |
John Riccitiello | | | ||||
| | | | |||
/s/ Luis Visoso | | | Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | | | July 29, 2022 |
Luis Visoso | | | ||||
| | | | |||
/s/ Roelof Botha | | | Director | | | July 29, 2022 |
Roelof Botha | | | | | ||
| | | | |||
/s/ Mary Schmidt Campbell | | | Director | | | July 29, 2022 |
Mary Schmidt Campbell, Ph.D. | | | | | ||
| | | | |||
/s/ Egon Durban | | | Director | | | July 29, 2022 |
Egon Durban | | | | | ||
| | | | |||
/s/ David Helgason | | | Director | | | July 29, 2022 |
David Helgason | | | | | ||
| | | | |||
/s/ Alyssa Henry | | | Director | | | July 29, 2022 |
Alyssa Henry | | | | |
Signature | | | Title | | | Date |
| | | | |||
/s/ Keisha Smith-Jeremie | | | Director | | | July 29, 2022 |
Keisha Smith-Jeremie | | | | | ||
| | | | |||
/s/ Michele K. Lee | | | Director | | | July 29, 2022 |
Michele K. Lee | | | | | ||
| | | | |||
/s/ Barry Schuler | | | Director | | | July 29, 2022 |
Barry Schuler | | | | | ||
| | | | |||
/s/ Robynne Sisco | | | Director | | | July 29, 2022 |
Robynne Sisco | | | | |
Exhibit Index | | | Description of Document |
| | Agreement and Plan of Merger, dated as of July 13, 2022, by and among Unity Software Inc., Ursa Aroma Merger Subsidiary Ltd. and ironSource Ltd., attached as Annex A to the joint proxy statement/prospectus included in this registration statement. | |
| | Asset Purchase Agreement, dated November 7, 2021, by and among Unity Software Inc., Weta Digital Limited, Film Property Trust, Weta holdings LLC, Joseph Letteri, and Weta Principal Fund LLC (Incorporated by reference to Exhibit 10.1 to Unity’s Current Report on Form 8-K, filed November 9, 2021). | |
| | Amended and Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to Unity’s Current Report on Form 8-K, filed September 22, 2020). | |
| | Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibit 3.4 to Unity’s Registration Statement on Form S-1/A, filed September 9, 2020). | |
| | Specimen common stock certificate of the Registrant (Incorporated by reference to Exhibit 4.1 to Unity’s Registration Statement on Form S-1/A, filed September 9, 2020). | |
| | Amended and Restated Investor Rights Agreement by and among the Registrant and certain of its stockholders, dated May 7, 2019 (Incorporated by reference to Exhibit 4.2 to Unity’s Registration Statement on Form S-1, filed August 24, 2020). | |
| | Description of Registrant’s Securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (Incorporated by reference to Exhibit 4.3 to Unity’s Annual Report on Form 10-K, filed on March 5, 2021). | |
| | Indenture, dated as of November 19, 2021, by and between Unity Software Inc. And U.S. Bank National Association, as Trustee (Incorporated by reference to Exhibit 4.1 to Unity’s Current Report on Form 8-K, filed November 19, 2021) | |
| | Form of Global Note, representing Unity Software Inc.’s 0% Convertible Senior Notes due 2026 (included as Exhibit A to the Indenture filed as Exhibit 4.4) (Incorporated by reference to Exhibit 4.2 to Unity’s Current Report on Form 8-K, filed November 19, 2021). | |
5.1* | | | Opinion of Morrison & Foerster LLP as to legality of securities offered under this prospectus. |
| | Form of Voting Agreement, dated as of July 13, 2022, by and among Unity and certain shareholders of ironSource party thereto, attached as Annex D to the joint proxy statement/prospectus included in this registration statement. | |
| | Form of Voting Agreement, dated as of July 13, 2022, by and among ironSource and certain stockholders of Unity party thereto, attached as Annex E to the joint proxy statement/prospectus included in this registration statement. | |
| | Unity Software Inc. 2009 Stock Plan and related form agreements (Incorporated by reference to Exhibit 10.1 to Unity’s Quarterly Report on Form 10-Q, filed November 13, 2020). | |
| | Unity Software Inc. 2019 Stock Plan and related form agreements (Incorporated by reference to Exhibit 10.2 to Unity’s Quarterly Report on Form 10-Q, filed November 13, 2020). | |
| | Unity Software Inc. 2020 Equity Incentive Plan and related form agreements (Incorporated by reference to Exhibit 10.3 to Unity’s Annual Report on Form 10-K, filed February 22, 2022). | |
| | Unity Software Inc. 2020 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.5 to Unity’s Registration Statement on Form S-1/A, filed September 9, 2020). | |
| | Form of Indemnification Agreement between the Registrant and each of its directors and executive officers (Incorporated by reference to Exhibit 10.1 to Unity’s Registration Statement on Form S-1/A, filed September 9, 2020). | |
| | Non-Employee Director Compensation Policy (Incorporated by Reference to Exhibit 10.6 to Unity’s Annual Report on Form 10-K, filed March 5, 2021). | |
| | Form of Confirmatory Offer Letter between Unity Technologies SF and each of Clive Downie, Ralph Hauwert, Ruth Ann Keene, Ingrid Lestiyo (Incorporated by reference to Exhibit 10.12 to Unity’s Registration Statement on Form S-1, filed August 24, 2020). | |
| | Unity Software Inc. Cash Incentive Bonus Plan (Incorporated by reference to Exhibit 10.16 to Unity’s Registration Statement on Form S-1, filed August 24, 2020). |
Exhibit Index | | | Description of Document |
| | Office Lease, dated November 25, 2015, by and between 26 Third Street (SF) Owner, LLC, and Unity Technologies SF, as amended by (i) the First Amendment to Office Lease, dated January 23, 2017, by and between 26 Third Street (SF) Owner, LLC, and Unity Technologies SF, and (ii) the Second Amendment to Office Lease, dated August 1, 2018, by and between 26 Third Street (SF) Owner, LLC, and Unity Technologies SF (Incorporated by reference to Exhibit 10.7 to Unity’s Registration Statement on Form S-1, filed August 24, 2020). | |
| | Commercial Lease Agreement, dated September 1, 2015, by and between PFA Ejendomme A/S and Unity Technologies ApS (Incorporated by reference to Exhibit 10.8 to Unity’s Registration Statement on Form S-1, filed August 24, 2020). | |
| | Form of Capped Call Transactions (Incorporated by reference to Exhibit 10.1 to Unity’s Current Report on Form 8-K, filed November 19, 2021). | |
| | Offer Letter Agreement, dated October 21, 2014, by and between Unity Software Inc. and John Riccitiello (Incorporated by reference to Exhibit 10.10 to Unity’s Registration Statement on Form S-1, filed August 24, 2020). | |
| | Unity Software Inc. G&A Executive Severance Plan (Incorporated by reference to Exhibit 10.14 to Unity’s Registration Statement on Form S-1, filed August 24, 2020). | |
| | Unity Software Inc. Senior Executive Severance Plan (Incorporated by reference to Exhibit 10.15 to Unity’s Registration Statement on Form S-1, filed August 24, 2020). | |
| | Offer letter and addendum, dated January 8, 2021, by and between Unity Technologies SF and Marc Whitten (Incorporated by reference to Exhibit 10.1 to Unity’s Quarterly Report on Form 10-Q, filed May 12, 2021). | |
| | Offer Letter, dated March 15, 2021, by and between Unity Technologies SF and Luis Felipe Visoso (Incorporated by reference to Exhibit 10.1 to Unity’s Current Report on Form 8-K, filed March 17, 2021). | |
| | Separation Agreement, dated March 24, 2021, by and between the Unity Technologies SF and Kimberly Jabal (Incorporated by reference to Exhibit 10.17 to Unity’s Current Report on Form 8-K, filed March 30, 2021). | |
| | Investment Agreement, dated as of July 13, 2022, by and between Unity, Silver Lake Alpine II, L.P., Silver Lake Partners VI, L.P. and Sequoia Capital Fund, L.P. (Incorporated by reference to Exhibit 10.3 to Unity’s Current Report on Form 8-K, filed July 15, 2022). | |
| | Offer Letter, dated December 28, 2021, by and between Unity Technologies SF and Carol Carpenter. | |
| | Subsidiaries of the Registrant (Incorporated by reference to Exhibit 21.1 to Unity’s Annual Report on Form 10-K, filed February 22, 2022). | |
| | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm | |
| | Consent of Kesselman & Kesselman, Certified Public Accountants (Isr.) a member firm of PricewaterhouseCoopers International Limited | |
23.3* | | | Consent of Morrison & Foerster LLP (included in exhibit 5.1) |
| | Powers of Attorney (included on signature page). | |
| | Consent of Morgan Stanley & Co. LLC | |
| | Consent of Jefferies LLC | |
99.4* | | | Form of Proxy Card of Unity Software Inc. |
99.5* | | | Form of Proxy Card of ironSource Ltd. |
| | Consent of Tomer Bar-Zeev to become director of Unity Software Inc. | |
99.7* | | | Consent of to become director of Unity Software Inc. |
99.8* | | | Consent of to become director of Unity Software Inc. |
| | Filing Fee Table |
* | To be filed by Amendment. |
** | Filed herewith. |
+ | Unity Software Inc. has omitted certain schedules and exhibits pursuant to Item 601(b)(2) of Regulation S-K and agrees to furnish supplementally to the SEC a copy of any omitted schedule or exhibit upon request by the SEC. |
Exhibit 10.19
December 28, 2021
Carol Carpenter
275 Vernal Ct.
Los Altos, CA 94022
Re: Offer of Employment by Unity Technologies SF
Dear Carol:
I am very pleased to confirm our offer to you of employment with Unity Technologies SF (the “Company”). You will report to John Riccitiello, Chief Executive Officer in the position of Chief Marketing Officer. The terms of our offer and the benefits currently provided by the Company are as follows:
1. Starting Salary. This is an exempt position. Your starting base salary will be USD $29,166.67 per month (USD $350,000.00 on an annualized basis). Any salary will be paid out on a semi-monthly basis less all applicable taxes, withholdings, and deductions required by law.
2. Corporate Bonus. You are eligible to receive a discretionary corporate bonus targeted at 75% (USD $262,500.00) of your earned annual salary during the previous fiscal year pursuant to the terms of the discretionary bonus letter that will be provided to you outside of this agreement and only to the extent determined appropriate by the Company in its sole discretion. In order to be eligible to receive a discretionary corporate bonus, you must be employed by the Company on the date that corporate bonuses are paid. Any bonus amount will be paid out less all applicable taxes, withholdings, and deductions required by law.
3. Start Date. Your start date will be February 22, 2022 (“Start Date”).
4. Location and Travel. You will work from the Company’s office in San Francisco, CA and be expected to travel as appropriate.
5. Benefits. Beginning on the Start Date, you will be eligible to participate in any benefits plans offered to the employees of the Company. A presentation of our benefits program will be given to you during your first month of employment. The Company may modify benefits policies from time-to-time, as it deems necessary.
6. Confidentiality; Company Rules and Policies. As an employee of the Company, you will have access to certain confidential information of the Company and you may, during the course of your employment, develop certain information or inventions that will be the property of the Company. To protect the interests of the Company, you will need to sign the Company’s standard “Employee Nondisclosure, Assignment and Non-Solicitation Agreement,” attached as Attachment 1, as a condition of your employment. During the period that you render services to the Company, you agree to not engage in any employment, business or activity that is in any way competitive with the business or proposed business of the Company. You will disclose to the Company in writing any other gainful employment, business or activity that you are currently associated with or participate in so the company may assess whether a conflict exists. You will not assist any other person or organization in competing with the Company or in preparing to engage in competition with the business or proposed business of the Company. You will also be required to abide by all Company rules and policies. Therefore you will be asked to acknowledge that you have read the employee handbook, Global Code of Conduct, and supplemental policies, which will be provided to you during your onboarding. In order to retain necessary flexibility in the administration of its policies and procedures, the Company reserves the right to change or revise its policies, procedures, and benefits at any time.
7. Global Privacy Notice to the Workforce. You confirm that you have read and understood Unity’s Data Privacy Policy attached as Attachment 2.
8. No Breach of Obligations to Prior Employers. We wish to impress upon you that we do not want you to, and we hereby direct you not to, bring with you any confidential or proprietary material of any former employer or to violate any other obligations you may have to any former employer. You represent that your signing of this offer letter, agreement(s) concerning restricted stock units or stock options granted to you, if any, under the Plan (as defined below) and the Company’s Employee Nondisclosure, Assignment and Non-Solicitation Agreement and your commencement of employment with the Company will not violate any agreement currently in place between yourself and current or past employers.
9. Restricted Stock Units. You will be granted restricted stock units (“RSUs”) with a value of $18,750,000.00 USD based on the average value of the stock price for the thirty (30) days preceding and including the date of the Board approval of the grant (“Initial Grant”). The number of RSUs will ultimately be determined and approved at the discretion of the Board and the Board may exercise its discretion to alter the number of shares that are granted by either increasing or decreasing the number of RSUs. Settlement of the RSUs will be conditioned on the satisfaction of a single vesting requirement known as a “Time-Based Requirement.” For the Initial Grant, the Time-Based Requirement will be satisfied at the rate of 25% of the RSUs on the next quarterly installment date following the first anniversary of your Start Date and an additional 6.25% on a quarterly basis thereafter, so long as you remain employed by the Company. The Initial Grant of such RSUs by the Parent Company is subject to the Board’s approval and this promise to recommend such approval is not a promise of compensation and is not intended to create any obligation on the part of the Parent Company.
Additionally, you will be granted RSUs with a value of USD $5,000,000.00 based on the average value of the stock price for the thirty (30) days preceding and including the date of the Board approval of the grant (the “Additional Grant”). The number of RSUs will ultimately be determined and approved at the discretion of the Board and the Board may exercise its discretion to alter the number of shares that are granted by either increasing or decreasing the number of RSUs. Settlement of the RSUs will be conditioned on the satisfaction of a single vesting requirement known as a “Time-Based Requirement.” For the Additional Award, the Time-Based Requirement will be satisfied at the rate of 50% of the RSUs on the first quarterly installment date following your Start Date, and 50% of the RSUs on the first quarterly installment date following the first anniversary of your Start Date, so long as you remain employed by the Company on each such date. The Additional Grant of such RSUs by the Parent Company is subject to the Board’s approval and this promise to recommend such approval is not a promise of compensation and is not intended to create any obligation on the part of the Parent Company.
10. Stock Options. In addition, you will be granted an option to purchase $6,250,000.00 USD worth of shares of the Company’s Common Stock (“Options”). The number of Options will ultimately be determined and approved at the discretion of the Board and the Board may exercise its discretion to alter the number of Options. The Awards will be granted under, and subject to the terms and conditions of, the Company’s 2020 Equity Incentive Plan (the “Plan”), as well as the terms and conditions to be set forth in any sub-plan to the Plan, equity award agreement (including any country appendix thereto) and notice of grant, which grant documents will be provided to you as soon as practicable after the date of grant. You will be required to sign or otherwise accept the grant documents in accordance with the Company’s acceptance procedures, if your Awards are approved.
If the Options are approved, you will be given the opportunity to purchase shares of Company Common Stock at an exercise price set at the fair market value of the Company common stock, which will be the closing sales price on the date of the grant for a share of Common Stock as quoted on the New York Stock Exchange. The Options will vest at the rate of 25% on the first anniversary of your start date, and an additional 1/48 per month thereafter, so long as you remain employed by the Company group.
In the spirit of making sure there is no miscommunication, we’re adding an extra sentence here to remind you that we make no promises with respect to the potential value or liquidity of our stock. Further details on the Plan and the terms and conditions of any specific grant to you will be provided upon approval of such grant by the Parent Company’s Board of Directors.
11. Vesting Acceleration. Under the Executive Severance Plan. You are eligible to participate in the Senior Executive Severance Plan (“Severance Plan”), which will be provided to you separately after your Start Date. If you accept the terms of the Severance Plan, notwithstanding the foregoing vesting schedules listed in the Stock Options, and Restricted Stock Units section above, you will be eligible for accelerated equity vesting under certain circumstances as set out in the Severance Plan.
12. At Will Employment. While we look forward to a long relationship, should you decide to accept our offer, you will be an at-will employee of the Company, which means the employment relationship can be terminated by either of us for any reason, at any time, with or without prior notice and with or without cause. Any statements or representations to the contrary (and, indeed, any statements contradicting any provision in this letter) should be regarded by you as ineffective. Further, your participation in any stock plan or benefit program is not to be regarded as assuring you of continuing employment for any particular period of time. Any modification or change in your at will employment status may only occur by way of a written employment agreement signed by you and the Chief People Officer of the Company.
13. Authorization to Work. Please note that because of employer regulations adopted in the Immigration Reform and Control Act of 1986, within three (3) business days of starting your new position you will need to present documentation demonstrating that you have authorization to work in the United States. If you have questions about this requirement, which applies to U.S. citizens and non-U.S. citizens alike, you may contact our personnel office.
14. Arbitration. You and the Company agree to submit to mandatory binding arbitration of any and all claims arising out of or related to your employment with the Company and the termination thereof, including, but not limited to, claims for unpaid wages, wrongful termination, torts, or other forms of compensation, and/or discrimination (including harassment) based upon any federal, state or other ordinance, statute, regulation or constitutional provision, except that each party may, at its, his or her option, seek injunctive relief in court related to the improper use, disclosure or misappropriation of a party’s proprietary, confidential or trade secret information. All arbitration hearings shall be conducted in San Francisco, California. THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO SUCH CLAIMS. The parties further agree that any arbitrable claims shall be resolved on an individual basis, and you agree to waive your right, to the extent allowed by applicable law, to consolidate any arbitrable claims with the claims of any other person in a class or collective action. This Agreement does not restrict your right to file administrative claims you may bring before any government agency where, as a matter of law, the parties may not restrict the employee’s ability to file such claims (including, but not limited to, the National Labor Relations Board, Equal Employment Opportunity Commission, disputes solely before government agencies, claims under applicable workers’ compensation law, and unemployment claims). However, the parties agree that, to the fullest extent permitted by law, arbitration shall be final and binding on the parties and shall be the exclusive remedy for the subject matter of such administrative claims. The arbitration shall be conducted through JAMS before a single neutral arbitrator, in accordance with the JAMS employment arbitration rules then in effect. The Company agrees to pay the fees and costs of the arbitrator. The JAMS rules may be found and reviewed at http://www.jamsadr.com/rules-employment-arbitration. If you are unable to access these rules, inform the Company’s Human Resources Department and a hardcopy will be provided to you. As in any arbitration, the burden of proof shall be allocated as provided by applicable law. The arbitrator shall issue a written decision that contains the essential findings and conclusions on which the decision is based. The arbitrator shall have the same authority as a court to award equitable relief, damages, costs, and fees (excluding the costs and fees of the arbitrator) as provided by law for the particular claims asserted. This arbitration clause shall be governed by and construed in all respects under the terms of the Federal Arbitration Act and the California Arbitration Act, including Cal. Civ. Proc. Code § 1283.05.
15. Entire Agreement. This offer, once accepted, constitutes the entire agreement between you and the Company with respect to the subject matter hereof and supersedes all prior offers, negotiations and agreements, if any, whether written or oral, relating to such subject matter. You acknowledge that neither the Company nor its agents have made any promise, representation or warranty whatsoever, either express or implied, written or oral, which is not contained in this agreement for the purpose of inducing you to execute the agreement, and you acknowledge that you have executed this agreement in reliance only upon such promises, representations and warranties as are contained herein.
16. Severability. If any term of this letter is held to be invalid, void, or unenforceable, the remainder of the terms herein will remain in full force and effect and will in no way be affected, and the parties will use their best efforts to find an alternative way to achieve the same result.
17. Governing Law. The terms of this letter and the resolution of any dispute as to the meaning, effect, performance or validity of this letter or arising out of, related to, or in any way connected with this letter, your employment with the Company or any other relationship between you and the Company (a “Dispute”) will be governed by the laws of the State of California, without giving effect to the principles of conflict of laws. To the extent not subject to arbitration as described in Section 10, you and the Company consent to the exclusive jurisdiction of, and venue in, the state courts in San Francisco County in the State of California (or in the event of exclusive federal jurisdiction, the courts of the Northern District of California in connection with any Dispute or any claim related to any Dispute).
18. Background Check. This offer is contingent upon the successful completion of background and reference checks.
19. Acceptance. This offer will remain open until December 29, 2021. If you decide to accept our offer, and I hope you will, please sign the enclosed copy of this letter in the space indicated and return it to me. Your signature will acknowledge that you have read and understood and agreed to the terms and conditions of this offer letter and the attached documents, if any. Should you have anything else that you wish to discuss, please do not hesitate to call me.
We look forward to the opportunity to welcome you to the Company.
Very truly yours, | |||
By: | /s/ Scott Pitasky | ||
Scott Pitasky, Chief People Officer |
I have read and understood this offer letter and hereby acknowledge, accept and agree to the terms as set forth above and further acknowledge that no other commitments were made to me as part of my employment offer except as specifically set forth herein.
/s/ Carol Carpenter |
December 29, 2021 | |
Carol Carpenter | Date |
Attachment 1
EMPLOYEE NONDISCLOSURE, ASSIGNMENT AND NON-SOLICITATION AGREEMENT
This Agreement sets forth in writing certain understandings and procedures in effect as of the date of my initial employment with Unity Technologies SF (“Company”).
1. | Duties. In return for the compensation now and hereafter paid to me, I will perform such duties for Company as the Company may designate from time to time. During my employment with Company, I will devote my best efforts to the interests of Company, will not engage in other employment or in any conduct in direct conflict with Company’s interests that would cause a material and substantial disruption to Company and will otherwise abide by all of Company’s policies and procedures. Furthermore, I will not (a) reveal, disclose or otherwise make available to any unauthorized person any Company password or key, whether or not the password or key is assigned to me or (b) obtain, possess or use in any manner a Company password or key that is not assigned to me. I will use my best efforts to prevent the unauthorized use of any laptop or personal computer, peripheral device, software or related technical documentation that the Company issues to me, and I will not input, load or otherwise attempt any unauthorized use of software in any Company computer, whether or not such computer is assigned to me. |
2. | “Proprietary Information” Definition. “Proprietary Information” includes (a) any information that is confidential or proprietary, technical or non-technical information of Company, including for example and without limitation, information related to Company Innovations (as defined in Section 4 |
below), concepts, techniques, processes, methods, systems, designs, computer programs, source documentation, trade secrets, formulas, development or experimental work, work in progress, forecasts, proposed and future products, marketing plans, business plans, customers and suppliers and any other nonpublic information that has commercial value or (b) any information Company has received from others that Company is obligated to treat as confidential or proprietary, which may be made known to me by Company, a third party or otherwise that I may learn during my employment with Company.
3. | Ownership and Nondisclosure of Proprietary Information. All Proprietary Information and all worldwide: patents (including, but not limited to, any and all patent applications, patents, continuations, continuation-in-parts, reissues, divisionals, substitutions, and extensions), copyrights, mask works, trade secrets and other worldwide rights in and to the Proprietary Information are the property of Company, Company’s assigns, Company’s customers and Company’s suppliers, as applicable. I will not disclose any Proprietary Information to anyone outside Company, and I will use and disclose Proprietary Information to those inside Company only as necessary to perform my duties as an employee of Company. If I have any questions as to whether information is Proprietary Information, or to whom, if anyone, inside Company, any Proprietary Information may be disclosed, I will ask my manager at Company. |
4. | “Innovations” Definition. In this Agreement, “Innovations” means all discoveries, designs, developments, improvements, inventions (whether or not protectable under patent laws), works of authorship, information fixed in any tangible medium of expression (whether or not protectable under copyright laws), trade secrets, know-how, ideas (whether or not protectable under trade secret laws), mask works, trademarks, service marks, trade names and trade dress. |
5. | Disclosure and License of Prior Innovations. I have listed on Exhibit A (“Prior Innovations”) attached hereto all Innovations relating in any way to Company’s business or demonstrably anticipated research and development or business, which were conceived, reduced to practice, created, derived, developed, or made by me prior to my employment with Company (collectively, the “Prior Innovations”). I represent that I have no rights in any such Company-related Innovations other than those Innovations listed in Exhibit A (“Prior Innovations”). If nothing is listed on Exhibit A (“Prior Innovations”), I represent that there are no Prior Innovations at the time of signing this Agreement. I hereby grant to Company and Company’s designees a royalty-free, irrevocable, worldwide, fully paid-up license (with rights to sublicense through multiple tiers of sublicensees) to practice all patent, copyright, moral right, mask work, trade secret and other intellectual property rights relating to any Prior Innovations that I incorporate, or permit to be incorporated, in any Innovations that I, solely or jointly with others, conceive, develop or reduce to practice within the scope of my employment with Company (the “Company Innovations”). Notwithstanding the foregoing, I will not |
incorporate, or permit to be incorporated, any Prior Innovations in any Company Innovations without Company’s prior written consent.
6. | Disclosure and Assignment of Company Innovations. I will promptly disclose and describe to Company all Company Innovations. I hereby do and will assign to Company or Company’s designee all my right, title, and interest in and to any and all Company Innovations. To the extent any of the rights, title and interest in and to Company Innovations cannot be assigned by me to Company, I hereby grant to Company an exclusive, royalty-free, transferable, irrevocable, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to practice such non-assignable rights, title and interest, including, but not limited to, the right to make, use, sell, offer for sale, import, have made, and have sold, such Company Innovations. To the extent any of the rights, title and interest in and to Company Innovations can neither be assigned nor licensed by me to Company, I hereby irrevocably waive and agree never to assert such non-assignable and non- licensable rights, title and interest against Company, any of Company’s successors in interest, or any of Company’s customers. This Section 6 shall not apply to any Innovations that (a) do not relate, at the time of conception, reduction to practice, creation, derivation, development or making of such Innovation to Company’s business or actual or demonstrably anticipated research, development or business; and (b) were developed entirely on my own time; and (c) were developed without use of any of Company’s equipment, supplies, facilities or trade secret information; and (d) did not result from any work I performed for Company. |
7. | Future Innovations. I will disclose promptly in writing to Company all Innovations conceived, reduced to practice, created, derived, developed, or made by me within the scope of my employment with the Company and for three (3) months thereafter, whether or not I believe such Innovations are subject to this Agreement, to permit a determination by Company as to whether or not the Innovations should be considered Company Innovations. Company will receive any such information in confidence. |
8. | Notice of Nonassignable Innovations to Employees in California. This Agreement does not apply to an Innovation that qualifies fully as a nonassignable invention under the provisions of Section 2870 of the California Labor Code. I acknowledge that a condition for an Innovation to qualify fully as a non-assignable invention under the provisions of Section 2870 of the California Labor Code is that the invention must be protected under patent laws. I have reviewed the notification in Exhibit B (“Limited Exclusion Notification”) and agree that my signature acknowledges receipt of the notification. |
9. | Cooperation in Perfecting Rights to Company Innovations. I agree to perform, during and after my employment, all acts that Company deems necessary or desirable to permit and assist Company, at its expense, in obtaining and enforcing the full benefits, enjoyment, rights and title throughout the world in the Company Innovations as provided to Company under this Agreement. If Company is unable for any reason to secure my signature to any document required to file, prosecute, register or memorialize the assignment of any rights or application or to enforce any right under any Company Innovations as provided under this Agreement, I hereby |
irrevocably designate and appoint Company and Company’s duly authorized officers and agents as my agents and attorneys-in-fact to act for and on my behalf and instead of me to take all lawfully permitted acts to further the filing, prosecution, registration, memorialization of assignment, issuance, and enforcement of rights under such Innovations, all with the same legal force and effect as if executed by me. The foregoing is deemed a power coupled with an interest and is irrevocable.
10. | Return of Materials. At any time upon Company’s request, and when my employment with Company is over, I will return all materials (including, without limitation, documents, drawings, papers, diskettes and tapes) containing or disclosing any Proprietary Information (including all copies thereof), as well as any keys, pass cards, identification cards, computers, printers, pagers, personal digital assistants or similar items or devices that the Company has provided to me. I will provide Company with a written certification of my compliance with my obligations under this Section. |
11. | No Violation of Rights of Third Parties. During my employment with Company, I will not (a) breach any agreement to keep in confidence any confidential or proprietary information, knowledge or data acquired by me prior to my employment with Company or (b) disclose to Company, or use or induce Company to use, any confidential or proprietary information or material belonging to any previous employer or any other third party. I am not currently a party, and will not become a party, to any other agreement that is in conflict, or will prevent me from complying, with this Agreement. |
12. | Survival. This Agreement (a) shall survive my employment by Company; (b) does not in any way restrict my right to resign or the right of Company to terminate my employment at any time, for any reason or for no reason; (c) inures to the benefit of successors and assigns of Company; and (d) is binding upon my heirs and legal representatives. |
13. | No Solicitation. During my employment with Company and for one (1) year thereafter, I will not solicit, encourage, or cause others to solicit or encourage any employees of Company to terminate their employment with Company. |
14. | Injunctive Relief. I agree that if I violate this Agreement, Company will suffer irreparable and continuing damage for which money damages are insufficient, and Company shall be entitled to injunctive relief and/or a decree for specific performance, and such other relief as may be proper (including money damages if appropriate), to the extent permitted by law. |
15. | Notices. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows, with notice deemed given as indicated: (a) by personal delivery, when actually delivered; (b) by overnight courier, upon written verification of receipt; (c) by facsimile transmission, upon acknowledgment of receipt of electronic transmission; or (d) by certified or registered mail, return receipt requested, upon verification of receipt. Notices to me shall be sent to any address in Company’s records or such other address as I may provide in writing. Notices to Company shall be sent to Company’s Human Resources Department or to such other address as Company may specify in writing. |
16. | Governing Law; Forum. This Agreement shall be governed by the laws of the United States of America and by the laws of the State of California, as such laws are applied |
to agreements entered into and to be performed entirely within California between California residents. Company and I each irrevocably consent to the exclusive personal jurisdiction of the federal and state courts located in California, as applicable, for any matter arising out of or relating to this Agreement, except that in actions seeking to enforce any order or any judgment of such federal or state courts located in California, such personal jurisdiction shall be nonexclusive. Additionally, notwithstanding anything in the foregoing to the contrary, a claim for equitable relief arising out of or related to this Agreement may be brought in any court of competent jurisdiction.
17. | Severability. If an arbitrator or court of law holds any provision of this Agreement to be illegal, invalid or unenforceable, (a) that provision shall be deemed amended to provide Company the maximum protection permitted by applicable law and (b) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected. |
18. | Waiver; Modification. If Company waives any term, provision or breach by me of this Agreement, such waiver shall not be effective unless it is in writing and signed by Company. No waiver shall constitute a waiver of any other or subsequent breach by me. This Agreement may be modified only if both Company and I consent in writing. |
19. | Entire Agreement. This Agreement, including any agreement to arbitrate claims or disputes relating to my employment that I may have signed in connection with my employment by Company, represents my entire understanding with Company with respect to the subject matter of this Agreement and supersedes all previous understandings, written or oral. |
I certify and acknowledge that I have carefully read all of the provisions of this Agreement and that I understand and will fully and faithfully comply with such provisions.
“COMPANY” UNITY TECHNOLOGIES SF |
EMPLOYEE: | |
By: Scott Pitasky, Chief People Officer | Carol Carpenter | |
/s/ Scott Pitasky | /s/ Carol Carpenter |
|
December 28, 2021 | December 29, 2021 |
Tel-Aviv, Israel
|
/s/ Kesselman & Kesselman
|
July 29, 2022
|
Certified Public Accountants (Isr.)
|
A member firm of PricewaterhouseCoopers International Limited
|
MORGAN STANLEY & CO. LLC
|
||
By:
|
/s/ Jeffrey N. Hogan
|
|
Name:
|
Jeffrey N. Hogan
|
|
Title:
|
Managing Director |
Exhibit 99.6
Consent to be Named as a Director Nominee
In connection with the filing by Unity Software Inc. (the “Company”) of the Registration Statement on Form S-4 (the “Registration Statement”) with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
Dated: July 29, 2022 |
/s/ Tomer Bar-Zeev |
|
Name: Tomer Bar-Zeev |
Security
Type
|
Security
Class
Title
|
Fee
Calculation
or Carry
Forward
Rule
|
Amount
Registered(1)
|
Proposed
Maximum
Offering
Price
Per
Unit
|
Maximum
Aggregate
Offering
Price(2)
|
Fee Rate
|
Amount of
Registration
Fee(3)
|
Carry
Forward
Form
Type
|
Carry
Forward
File
Number
|
Carry
Forward
Initial
effective
date
|
Filing Fee
Previously
Paid In
Connection
with
Unsold
Securities
to
be
Carried
Forward
|
|
Newly Registered Securities
|
||||||||||||
Fees to Be Paid
|
Equity
|
Common Stock, par value $0.000005 per share
|
457(c) and 457(f)(1)
|
126,099,935 shares
|
N/A
|
$4,081,747,196.18
|
.0000927
|
$378,377.97
|
||||
Fees Previously Paid
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||
Carry Forward Securities
|
||||||||||||
Carry Forward Securities
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||
Total Offering Amounts
|
$4,081,747,196.18
|
$378,377.97
|
||||||||||
Total Fees Previously Paid
|
—
|
|||||||||||
Total Fee Offsets
|
—
|
|||||||||||
Net Fee Due
|
$378,377.97
|
(1) |
Represents the maximum number of shares of common stock, par value $0.000005 per share, of Unity Software Inc. (“Unity common stock”) estimated to be issuable or subject to stock-based awards that may be assumed by the registrant upon the
completion of the transactions described herein. The number of shares of Unity common stock being registered is based on (a) the sum of (i) 1,023,158,214 Class A ordinary shares, no par value (“ironSource Class A ordinary shares”) and Class B
ordinary shares, no par value (“ironSource Class B ordinary shares” and together with the ironSource Class A ordinary shares, the “ironSource ordinary shares”) issued and outstanding as of July 15, 2022, other than shares held by subsidiaries
of ironSource Ltd., and, (ii) a maximum of 134,784,253 ironSource ordinary shares issuable upon the exercise or settlement of ironSource options and ironSource RSUs that were outstanding as of July 15, 2022, multiplied
by (b) the exchange ratio of 0.1089 shares of Unity common stock for each ironSource ordinary share, rounded to the nearest share.
|
(2) |
Calculated pursuant to Rules 457(c) and 457(f)(1) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and solely for the purpose of calculating the registration fee. The proposed maximum aggregate offering
price of the securities being registered was calculated based on the product of (i) $3.53, the average of the high and low prices for ironSource ordinary shares as reported on The New York Stock Exchange on July 26, 2022, multiplied by (ii) 1,157,942,467 (which represents the estimated maximum number of ironSource ordinary shares that may be exchanged in the transactions described herein for the merger consideration, as
described in footnote (1) above). In accordance with Rule 416, this Registration Statement also covers an indeterminate number of additional shares of ironSource securities as may be issuable as a result of stock splits, stock dividends or
similar transactions.
|
(3) |
The registration fee for the securities registered hereby has been calculated pursuant to Section 6(b) of the Securities Act, by multiplying the proposed maximum aggregate offering price for the securities by 0.00009270.
|