Unity Announces Pricing of Upsized $600.0 Million Offering of Convertible Senior Notes
Unity Software has announced the pricing of $600.0 million in 0% Convertible Senior Notes due 2030, an upsized offering from the previously announced $500.0 million. The company also granted initial purchasers an option to purchase up to an additional $90.0 million in notes.
Unity expects net proceeds of approximately $586.8 million (or $675.0 million if the additional purchase option is exercised). The company plans to use about $38.6 million for capped call transactions and the remaining proceeds, along with cash on hand, to repurchase approximately $644.3 million in aggregate principal amount of its 2026 Notes for approximately $600.0 million.
The Notes will mature on March 15, 2030, with an initial conversion rate of 27.6656 shares of Unity's common stock per $1,000 principal amount, equivalent to a conversion price of approximately $36.15 per share (a 32.5% premium to the February 24, 2025 closing price).
Unity Software ha annunciato il prezzo di 600,0 milioni di dollari in Note Senior Convertibili al 0% con scadenza nel 2030, un'offerta aumentata rispetto ai precedenti 500,0 milioni di dollari. L'azienda ha anche concesso agli acquirenti iniziali un'opzione per acquistare fino a ulteriori 90,0 milioni di dollari in note.
Unity prevede proventi netti di circa 586,8 milioni di dollari (o 675,0 milioni di dollari se l'opzione di acquisto aggiuntiva viene esercitata). L'azienda prevede di utilizzare circa 38,6 milioni di dollari per transazioni di capped call e i restanti proventi, insieme alla liquidità disponibile, per riacquistare circa 644,3 milioni di dollari in valore nominale delle sue Note 2026 per circa 600,0 milioni di dollari.
Le Note scadranno il 15 marzo 2030, con un tasso di conversione iniziale di 27,6656 azioni delle azioni ordinarie di Unity per ogni 1.000 dollari di valore nominale, equivalente a un prezzo di conversione di circa 36,15 dollari per azione (un premio del 32,5% rispetto al prezzo di chiusura del 24 febbraio 2025).
Unity Software ha anunciado el precio de 600.0 millones de dólares en Notas Senior Convertibles al 0% con vencimiento en 2030, una oferta ampliada respecto a los 500.0 millones de dólares previamente anunciados. La compañía también otorgó a los compradores iniciales la opción de adquirir hasta un adicional de 90.0 millones de dólares en notas.
Unity espera ingresos netos de aproximadamente 586.8 millones de dólares (o 675.0 millones de dólares si se ejerce la opción de compra adicional). La compañía planea utilizar alrededor de 38.6 millones de dólares para transacciones de capped call y los ingresos restantes, junto con el efectivo disponible, para recomprar aproximadamente 644.3 millones de dólares en monto principal agregado de sus Notas 2026 por aproximadamente 600.0 millones de dólares.
Las Notas vencerán el 15 de marzo de 2030, con una tasa de conversión inicial de 27.6656 acciones de las acciones ordinarias de Unity por cada 1,000 dólares de monto principal, equivalente a un precio de conversión de aproximadamente 36.15 dólares por acción (una prima del 32.5% respecto al precio de cierre del 24 de febrero de 2025).
유니티 소프트웨어는 6억 달러의 0% 전환형 고급 채권 2030년 만기 가격을 발표했으며, 이는 이전에 발표된 5억 달러의 제안보다 증가한 것입니다. 회사는 초기 구매자에게 최대 9천만 달러의 채권을 추가로 구매할 수 있는 옵션도 부여했습니다.
유니티는 약 5억 8680만 달러의 순수익(추가 구매 옵션이 행사될 경우 6억 7500만 달러)을 예상하고 있습니다. 회사는 약 3천860만 달러를 캡콜 거래에 사용하고, 나머지 수익과 보유 현금을 사용하여 약 6억 4430만 달러의 2026년 채권 총액을 약 6억 달러에 재매입할 계획입니다.
채권은 2030년 3월 15일에 만기가 되며, 초기 전환 비율은 1,000달러의 원금에 대해 27.6656주의 유니티 보통주로, 이는 주당 약 36.15달러의 전환 가격에 해당합니다(2025년 2월 24일 종가 대비 32.5% 프리미엄).
Unity Software a annoncé le prix de 600,0 millions de dollars en Obligations Senior Convertibles à 0% arrivant à échéance en 2030, une offre augmentée par rapport aux 500,0 millions de dollars précédemment annoncés. La société a également accordé aux acheteurs initiaux une option d'achat pouvant aller jusqu'à 90,0 millions de dollars supplémentaires en obligations.
Unity s'attend à des produits nets d'environ 586,8 millions de dollars (ou 675,0 millions de dollars si l'option d'achat supplémentaire est exercée). La société prévoit d'utiliser environ 38,6 millions de dollars pour des transactions de capped call et les produits restants, ainsi que la trésorerie disponible, pour racheter environ 644,3 millions de dollars en montant principal total de ses Obligations 2026 pour environ 600,0 millions de dollars.
Les Obligations arriveront à échéance le 15 mars 2030, avec un taux de conversion initial de 27,6656 actions des actions ordinaires de Unity pour chaque 1 000 dollars de montant principal, équivalent à un prix de conversion d'environ 36,15 dollars par action (une prime de 32,5 % par rapport au prix de clôture du 24 février 2025).
Unity Software hat den Preis von 600,0 Millionen Dollar für 0% wandelbare Senior Notes mit Fälligkeit 2030 bekannt gegeben, eine vergrößerte Ausgabe im Vergleich zu den zuvor angekündigten 500,0 Millionen Dollar. Das Unternehmen gewährte den ursprünglichen Käufern auch die Option, bis zu zusätzlich 90,0 Millionen Dollar an Notes zu erwerben.
Unity erwartet Nettoerlöse von etwa 586,8 Millionen Dollar (oder 675,0 Millionen Dollar, wenn die zusätzliche Kaufoption ausgeübt wird). Das Unternehmen plant, etwa 38,6 Millionen Dollar für capped call Transaktionen zu verwenden und die verbleibenden Erlöse, zusammen mit vorhandener Liquidität, um etwa 644,3 Millionen Dollar an Gesamtnennbetrag seiner 2026 Notes für etwa 600,0 Millionen Dollar zurückzukaufen.
Die Notes werden am 15. März 2030 fällig, mit einem anfänglichen Umwandlungsverhältnis von 27,6656 Aktien von Unitys Stammaktien pro 1.000 Dollar Nennbetrag, was einem Umwandlungspreis von etwa 36,15 Dollar pro Aktie entspricht (einem Aufschlag von 32,5% gegenüber dem Schlusskurs vom 24. Februar 2025).
- Upsized offering from $500M to $600M indicates strong investor demand
- Expected net proceeds of $586.8M (potentially $675M with additional purchase option)
- Strategic debt refinancing by repurchasing $644.3M of 2026 Notes for $600M
- Capped call transactions reduce potential dilution to existing shareholders
- New debt issuance adds to financial obligations despite zero coupon rate
- Conversion of notes could lead to future dilution of existing shareholders
- Transaction costs include approximately $13.2M in discounts, commissions and expenses
Insights
Unity's announcement of a $600 million convertible note offering represents a strategic financial maneuver that deserves careful investor attention. This upsized offering (from the initially planned $500 million) comes at a critical juncture for the company.
The transaction's structure reveals several key insights. Unity is effectively refinancing its balance sheet by using these proceeds to repurchase $644.3 million of its 2026 convertible notes for approximately $600 million - capturing a ~7% discount on face value. This discount suggests the market had been valuing these existing notes below par, likely reflecting concerns about Unity's financial trajectory and conversion prospects.
The new notes' zero-coupon structure is particularly noteworthy in today's interest rate environment. While Unity avoids cash interest payments, the conversion premium of 32.5% (with a $36.15 conversion price) represents the effective cost. This premium is relatively modest compared to stronger technology companies, reflecting the market's assessment of Unity's risk profile and growth potential.
Unity's implementation of capped call transactions with a cap price of $47.74 (a 75% premium to current share price) serves as an anti-dilution insurance policy. These transactions effectively raise the economic conversion price and could reduce potential dilution by approximately 25-30%, protecting existing shareholders if Unity's stock appreciates substantially before maturity.
The financial engineering here extends Unity's debt maturity profile by four years (from 2026 to 2030) while maintaining a similar capital structure. This breathing room comes at a critical time as Unity navigates significant business challenges, including recent layoffs, pricing model controversies, and intense competition in the game engine market from Epic's Unreal Engine.
For investors, this transaction should be viewed as management buying time rather than addressing fundamental business challenges. While the refinancing reduces near-term liquidity pressure, Unity still faces the core challenge of improving its underlying business performance and competitive positioning to generate sufficient cash flow before these new obligations mature in 2030.
Unity's $600 million convertible note offering represents a calculated financial chess move that reveals much about both the company's current position and management's outlook. This debt restructuring transaction warrants careful analysis beyond the headline numbers.
The most telling aspect is Unity's ability to retire $644.3 million of 2026 notes for $600 million - capturing a 6.9% discount to face value. This discount indicates the market had been valuing these notes below par, reflecting concerns about Unity's fundamental performance and conversion prospects. By executing this transaction, management is opportunistically exploiting this market sentiment while extending its maturity runway by four years.
The conversion terms are particularly revealing. The 32.5% conversion premium is notably lower than the 40-50% premiums typically commanded by high-growth tech companies with stronger balance sheets. This suggests the market required more favorable conversion terms to absorb this debt, despite the zero-coupon structure that eliminates cash interest payments.
Unity's implementation of capped call transactions with a $47.74 cap price effectively creates a synthetic convertible with a higher conversion price. This financial engineering reduces potential dilution by approximately 25-30% if Unity's stock appreciates substantially. However, this dilution protection comes at a cost of $38.6 million - representing about 6.4% of the gross proceeds, which is on the higher end of typical capped call costs.
The timing of this refinancing is strategic, coming after Unity's recent restructuring announcements and amid ongoing challenges in its core business. By extending maturities to 2030, management is buying important time to execute its turnaround strategy without near-term refinancing pressure. However, this also increases the total potential dilution if Unity fails to generate sufficient organic cash flow before maturity.
For investors, this transaction should be viewed as a defensive financial move rather than a signal of strength. While it addresses near-term maturity concerns, the underlying business fundamentals that will determine Unity's ability to refinance or repay these notes in 2030 remain the critical factor to watch. The market's willingness to accept these terms suggests cautious optimism about Unity's long-term prospects, but with significant reservations about its current trajectory.
Unity 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
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 March 15, 2030, unless earlier converted, redeemed or repurchased.
Unity estimates that the net proceeds from the Offering will be approximately
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 27.6656 shares of Unity’s common stock per
Unity may not redeem the Notes prior to March 20, 2028. Unity may redeem for cash all or any portion of the Notes, at its option, on or after March 20, 2028 if the last reported sale price of Unity’s common stock has been at least
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
In connection with the pricing of the Notes, Unity entered into capped call transactions with certain of the initial purchasers or their respective affiliates 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
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 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 date 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.
Concurrently with the pricing of the notes in the Offering, Unity entered into privately negotiated transactions with certain holders of the 2026 Notes to repurchase, for approximately
In connection with any Note Repurchase Transaction, Unity expects that holders of the 2026 Notes who agree to have their 2026 Notes repurchased and who have hedged their equity price risk with respect to such Notes (the “Hedged Holders”) will unwind all or part of their hedge positions by buying Unity’s common stock and/or entering into or unwinding various derivative transactions with respect to Unity’s common stock. The amount of Unity’s common stock to be purchased by the Hedged Holders or the notional amount of shares of Unity’s common stock underlying such derivative transactions may be substantial in relation to the historic average daily trading volume of Unity’s common stock. This activity by the Hedged Holders could increase (or reduce the size of any decrease in) the market price of Unity’s common stock, including concurrently with the pricing of the Notes, which could have resulted in a higher effective conversion price for the Notes. Unity cannot predict the magnitude of such market activity or the overall effect it will have on the price of the Notes offered hereby or its common stock.
The notes were only offered to persons reasonably believed to be 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 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
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.
Forward-Looking Statements
This press release contains “forward-looking” statements that involve risks and uncertainties regarding, among other things, the proposed Offering, including statements concerning the anticipated completion and timing of the Notes, the capped call transactions, the Note Repurchase Transactions and any unwind transactions; the anticipated use of proceeds from the proposed Offering; and the potential impact of the forgoing or related transactions on dilution to holders of Unity’s common stock, the market price of our common stock or the trading price of the Notes. 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, 2024 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.
Source: Unity
View source version on businesswire.com: https://www.businesswire.com/news/home/20250224918045/en/
Unity PR Contact:
Julianne Whitelaw
UnityComms@unity3d.com
Source: Unity Software Inc.
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