Unity Software shares climbed 4% on Tuesday after media reports indicated the company is examining strategic alternatives for its China business, including putting the unit up for sale.
According to people familiar with the matter, Unity - the San Francisco-based developer of 3-D game-engine technology - has enlisted an adviser to sound out potential buyers and measure interest in the Chinese operations. Those people said Unity may aim for a valuation for the unit that exceeds $1 billion.
Sources emphasized that deliberations are still underway and could conclude without any transaction. The company did not provide immediate comment when contacted.
Unity supplies tools and software used to create and operate interactive, real-time 3-D content across a range of platforms. Its technology supports development for mobile devices, personal computers, and gaming consoles, according to the company description.
The reported process appears to be at an exploratory stage, with Unity engaging advisers to determine market appetite. While a targeted valuation above $1 billion was mentioned by people familiar with the discussions, no formal terms or buyers have been disclosed. Market reaction to the report was swift, with the stock posting a modest intraday gain as investors digested the potential move.
Unity's potential divestiture of its China business would focus attention on international operations and strategic portfolio management at the company. For now, the situation remains fluid: company representatives have not confirmed details, and reports stressed that deliberations may not culminate in a sale.
Observers and market participants will likely watch for further statements from Unity or any formal process to solicit bids, but at present the information available is limited to reports that the company is assessing options and has engaged an adviser to gauge interest in the business.