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Mobile monetization firm IronSource, which gets most of its revenues from game companies, said today it will go public through a special purpose acquisition company (SPAC) on Tuesday morning.

When the company announced the deal in March, it noted that the SPAC puts IronSource at a valuation of $11.1 billion, though we’ll find out tomorrow how much investors believe the company is worth. The deal is the latest driven by the popularity of mobile games and apps.

The Tel Aviv, Israel-based IronSource said it would raise $2.15 billion in cash proceeds for both shareholders and the company itself through the transactions, which includes both the proceeds from the SPAC (a faster way of going public compared to an initial public offering) and an additional private investment known as a PIPE, or private investment in a public equity.

SPACs have become a popular way for fast-moving companies to go public without all the hassle of a traditional IPO. SPACs are set up by managers who raise money in a blind shell public company, and the investors don’t know what they’re putting their money into. The SPAC then finds an appropriate company to merge with, thereby taking a private company public in a way that is faster than an initial public offering process. SPAC deals are often combined with PIPEs to raise money from well-known investors to shore up confidence in the deal.


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IronSource will combine with Thoma Bravo Advantage (currently traded on the New York Stock Exchange under the symbol TBA), a SPAC, to create what it calls a platform for the app economy. The company becomes the second major game-related company from Israel to tap the public markets, after social casino game maker Playtika raised $1.9 billion at a $11.4 billion valuation in an IPO in January. IronSource said its mobile monetization platform powers more than 87% of the top 100 mobile games. IronSource will trade under the stock symbol “IS.”

Company financials

IronSource's Sonic platform for A/B testing.

Above: IronSource’s Sonic platform for A/B testing.

Image Credit: IronSource

Back in March, IronSource said it recorded 2020 revenue of $332 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $104 million.

Revenue was up 83% in 2020 compared to 2019, and it has adjusted EBITDA margins of 31%. The company serves over 2.3 billion monthly active users across its global customer base.

IronSource said its core addressable market is projected to grow to as much as $41 billion by 2025. The transaction is expected to provide up to $2.3 billion in cash proceeds (a portion of which will be used for purchases from IronSource equity holders), including an oversubscribed PIPE of $1.3 billion and $1 billion of cash held in the trust account of Thoma Bravo Advantage, assuming no redemptions by public shareholders.

After the transaction (and assuming no redemptions by public shareholders), the company is expected to have approximately $660 million of unrestricted cash. An affiliate of Thoma Bravo, L.P. has committed $300 million to the PIPE; Orlando Bravo will join IronSource’s board the closing of the deal.

IronSource' Supersonic has launched LiveGames.

Above: IronSource’ Supersonic has launched LiveGames.

Image Credit: IronSource

The PIPE includes investors such as Tiger Global Management, Counterpoint Global (Morgan Stanley), Nuveen, Hedosophia, Wellington Management, The Baupost Group, and certain funds managed by Fidelity Investments Canada.

Upon closing of the transaction, the combined company will operate under the IronSource name. CEO Tomer Bar Zeev and IronSource’s founder-led management team will continue to lead the combined company. Orlando Bravo, the chairman/managing partner of Thoma Bravo Advantage, will join the IronSource board.

“Today marks an important step for IronSource as a leading platform for global app and game developers, and we are excited to enter the public markets and continue to advance our platform and our vision for the company and the app economy,” said Zeev in a statement. “We are proud to achieve this milestone, which is a testament to the strength of our platform, and we look forward to our future as a public company. I am grateful to the IronSource team for all their hard work, which has brought us to this pivotal moment, and for the unparalleled support of our partner Thoma Bravo Advantage.”

IronSource said its monetization platform is designed to enable any app or game developer to turn their app into a scalable, successful business by helping them to monetize and analyze their app and grow and engage their users through multiple channels, including unique on-device distribution through partnerships with telecom operators such as Orange and a device makers such as Samsung.

In 2020, IronSource said 94% of its revenues came from 291 customers with more than $100,000 of annual revenue, a dollar-based net expansion rate of 149%.

As a public company, IronSource is expected to benefit from the financial and operational support of Thoma Bravo, which has made more than 300 software investments.

Market details

IronSource's LiveGames helps studios manage their game data.

Above: IronSource’s LiveGames helps studios manage their game data.

Image Credit: IronSource

The app economy is one of the fastest-growing markets today, with millions of apps available to billions of users who spend 83% of their time on mobile devices inside apps. Within the app economy, games are the leading category of apps, accounting for the majority of apps in the Apple App Store in 2020 according to Statista, and IronSource said it has established a strong position within this category, focusing its product development and innovation on building core infrastructure serving mobile game developers.

IronSource said 14 of the 19 games published through the IronSource platform were ranked in the top 10 most downloaded games on either the Apple App Store or Google Play Store over the course of 2020, and one of them — Join Clash — was the most downloaded game in the world in February 2021.

The IronSource platform is made up of two solution suites, IronSource Sonic and IronSource Aura. The Sonic solution suite supports developers as they launch, monetize, and scale their apps and games. The Aura solution suite enables telecom operators to enrich the device experience by creating new engagement touchpoints that deliver relevant content for their users across the entire lifecycle of the device. This creates a unique on-device distribution channel for developers to promote their apps as an integral part of the device experience.

The company said these two suites differentiate the IronSource platform. Once a developer starts working with IronSource, they typically expand their use to multiple solutions within the platform, driving a high dollar-based net expansion rate and gross customer retention rate, the company said.

More details

Above: IronSource creates dashboards of data for game and app companies.

Image Credit: IronSource

The transaction has been unanimously approved by the boards of IronSource and Thoma Bravo Advantage, and it is expected to close in the second quarter of 2021, subject to customary closing conditions. Thoma Bravo Advantage’s shareholders approved the deals on June 22.

Shares issued to the sponsor of Thoma Bravo Advantage will be subject to a 12-month lock-up with limited releases based on the trading price of the shares following the 150th day after the closing of the transaction; nearly all of IronSource’s shareholders will be subject to a 6-month lock-up after the closing of the transaction, subject to the same early release applicable to Thoma Bravo Advantage.

Following the closing of the transaction, IronSource will have a dual-class equity structure where current shareholders of IronSource will own Class B ordinary shares with five votes per share and holders of Class A ordinary shares, including Thoma Bravo Advantage’s shareholders, will have one vote per share.

Goldman Sachs & Co., Jefferies, and Citigroup Global Markets served as financial advisers to ironSource and as placement agents in the PIPE, and Latham & Watkins and Meitar Law Offices served as legal advisors to IronSource. Kirkland & Ellis, Goldfarb Seligman & Co., and Cadwalader, Wickersham & Taft served as legal advisors to Thoma Bravo Advantage.

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