Unity Software Inc. (“Unity”) (NYSE: U), the world’s leading
platform for creating and operating interactive, real-time 3D
(RT3D) content, today announced the pricing of $1.5 billion
aggregate principal amount of 0% Convertible Senior Notes due 2026
(the “Notes”) in a private placement (the “Offering”) to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the “Securities Act”).
Unity has also granted the initial purchasers of the Notes an
option to purchase, within a 13-day period beginning on, and
including, the date on which the Notes are first issued, up to an
additional $225.0 million aggregate principal amount of Notes. The
sale of the Notes to the initial purchasers is expected to close on
November 19, 2021, subject to customary closing conditions.
The Notes will be general unsecured obligations of Unity and
will not bear regular interest, and the principal amount of the
Notes will not accrete. The Notes will mature on November 15, 2026,
unless earlier converted, redeemed or repurchased.
Unity estimates that the net proceeds from the Offering will be
approximately $1.48 billion (or approximately $1.70 billion if the
initial purchasers exercise their option to purchase additional
Notes in full) to Unity after deducting the initial purchasers’
discounts and commissions and estimated Offering expenses payable
by Unity. Unity expects to use a portion of the net proceeds from
the Offering to pay the cost of the capped call transactions
described below, and the remaining net proceeds for general
corporate purposes, as well as for acquisitions or strategic
investments in complementary businesses or technologies. If the
initial purchasers exercise their option to purchase additional
Notes, Unity expects to use a portion of the net proceeds from the
sale of the additional Notes to enter into additional capped call
transactions with the Option Counterparties (as defined below) and
the remaining net proceeds for general corporate purposes and for
acquisitions or strategic investments in complementary businesses
or technologies.
The Notes will be convertible at the option of the holders in
certain circumstances. Upon conversion, Unity will pay or deliver,
as the case may be, cash, shares of Unity’s common stock or a
combination of cash and shares of Unity’s common stock, at its
election. The initial conversion rate is 3.2392 shares of Unity’s
common stock per $1,000 principal amount of Notes (equivalent to an
initial conversion price of approximately $308.72 per share of
Unity’s common stock, which represents a conversion premium of
approximately 57.5% to the last reported sale price of Unity’s
common stock on The New York Stock Exchange on November 16, 2021),
and will be subject to customary anti-dilution adjustments.
Unity may not redeem the Notes prior to November 20, 2024. Unity
may redeem for cash all or any portion of the Notes, at its option,
on or after November 20, 2024 if the last reported sale price of
Unity’s common stock has been at least 130% of the conversion price
then in effect for at least 20 trading days (whether or not
consecutive) during any 30 consecutive trading day period
(including the last trading day of such period) ending on, and
including, the trading day immediately preceding the date on which
Unity provides notice of redemption at a redemption price equal to
100% of the principal amount of the Notes to be redeemed, plus
accrued and unpaid special interest, if any, to, but excluding, the
redemption date. If Unity redeems less than all of the outstanding
Notes, at least $150 million aggregate principal amount of Notes
must be outstanding and not subject to redemption as of, and after
giving effect to, delivery of the relevant redemption notice.
If Unity undergoes a “fundamental change,” then, subject to
certain conditions and limited exceptions, holders may require
Unity to repurchase for cash all or any portion of their Notes in
principal amounts of $1,000 or an integral multiple thereof at a
repurchase price equal to 100% of the principal amount of the Notes
to be repurchased, plus accrued and unpaid special interest, if
any, to, but excluding, the fundamental change repurchase date. In
addition, following certain corporate events that occur prior to
the maturity date of the Notes or if Unity delivers a notice of
redemption, Unity will, in certain circumstances, increase the
conversion rate of the Notes for a holder who elects to convert its
Notes in connection with such a corporate event or convert its
Notes called (or deemed called) for redemption during the related
redemption period, as the case may be.
In connection with the pricing of the Notes, Unity entered into
capped call transactions with certain of the initial purchasers or
affiliates thereof and other financial institutions (the “Option
Counterparties”). The capped call transactions cover, subject to
customary adjustments, the number of shares of Unity’s common stock
initially underlying the Notes. The capped call transactions are
expected generally to reduce the potential dilution to Unity’s
common stock upon any conversion of Notes and/or offset any cash
payments Unity is required to make in excess of the principal
amount of converted Notes, as the case may be, with such reduction
and/or offset subject to a cap.
The cap price of the capped call transactions relating to the
Notes will initially be approximately $343.02, which represents a
premium of approximately 75.0% over the last report sale price of
Unity’s common stock on The New York Stock Exchange on November 16,
2021, and is subject to certain adjustments under the terms of the
capped call transactions.
In connection with establishing their initial hedges of the
capped call transactions, Unity expects the Option Counterparties
or their respective affiliates will enter into various derivative
transactions with respect to Unity’s common stock and/or purchase
shares of Unity’s common stock concurrently with or shortly after
the pricing of the Notes, including with, or from, as the case may
be, certain investors in the Notes. This activity could increase
(or reduce the size of any decrease in) the market price of Unity’s
common stock or the trading price of the Notes at that time.
In addition, the Option Counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to Unity’s common stock
and/or purchasing or selling Unity’s common stock or other
securities of Unity in secondary market transactions following the
pricing of the Notes and prior to the maturity of the Notes (and
are likely to do so during the 40 trading day period beginning on
the 41st scheduled trading day prior to the maturity date of the
Notes, or, to the extent Unity exercises the relevant election
under the capped call transactions, following any repurchase,
redemption or conversion of the Notes). This activity could also
cause or avoid an increase or a decrease in the market price of
Unity’s common stock or the Notes which could affect a noteholder’s
ability to convert the Notes and, to the extent the activity occurs
during any observation period related to a conversion of Notes,
this could affect the number of shares, if any, and value of the
consideration that a noteholder will receive upon conversion of its
Notes.
The notes were only offered to qualified institutional buyers
pursuant to Rule 144A promulgated under the Securities Act by means
of a private offering memorandum. The Notes and any shares of
Unity’s common stock potentially issuable upon conversion of the
Notes have not been and will not be registered under the Securities
Act, any state securities laws or the securities laws of any other
jurisdiction, and unless so registered, may not be offered or sold
in the United States absent registration or an applicable exemption
from, or in a transaction not subject to, the registration
requirements of the Securities Act and other applicable securities
laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any of these securities nor shall
there be any sale of these securities in any state or jurisdiction
in which such an offer, solicitation or sale would be unlawful
prior to the registration or qualification thereof under the
securities laws of any such state or jurisdiction.
About Unity
Unity is the world’s leading platform for creating and operating
interactive, real-time 3D content. Our platform provides a
comprehensive set of software solutions to create, run, and
monetize interactive, real-time 2D and 3D content for mobile
phones, tablets, PCs, consoles, and augmented and virtual reality
devices. We serve customers of all sizes, at every stage of
maturity, from individual creators to large enterprises.
Forward-Looking Statements
This press release contains “forward-looking” statements that
involve risks and uncertainties, including statements concerning
the timing and completion of the Offering of the Notes and the
capped call transactions and the anticipated use of proceeds from
the Offering. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause
actual events to differ materially from Unity’s plans. These risks
include, but are not limited to, market risks, trends and
conditions, and those risks included in the section titled “Risk
Factors” in Unity’s Securities and Exchange Commission (“SEC”)
filings and reports, including its Annual Report on Form 10-K for
the year ended December 31, 2020, its Quarterly Reports on Form
10-Q for the quarters ended March 31, 2021, June 30, 2021 and
September 30, 2021 and other filings that Unity makes from time to
time with the SEC, which are available on the SEC’s website at
www.sec.gov. All forward-looking statements contained in this press
release speak only as of the date on which they were made. Unity
undertakes no obligation to update such statements to reflect
events that occur or circumstances that exist after the date on
which they were made.
Any unreleased services, features, or functions referenced in
this document, our website, or other press releases or public
statements that are not currently available are subject to change
at Unity’s discretion and may not be delivered as planned or at
all. Customers who purchase Unity services should make their
purchase decisions based upon services, features, and functions
that are currently available.
© 2021 Unity Software Inc. All rights reserved. The Unity design
logos, “Unity” and our other registered or common law trademarks,
service marks, or trade names are the property of Unity Software
Inc. or its affiliates. Other trade names, trademarks, and service
marks are the property of their respective owners.
Source: Unity
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version on businesswire.com: https://www.businesswire.com/news/home/20211116006494/en/
Investor Relations: Richard Davis ir@unity3d.com
Media Relations: Marisa Graves marisag@unity3d.com
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