(Reuters) – SoftBank Group’s Arm is targeting a valuation of more than $52 billion in its IPO as the chip designer heads for its biggest IPO of the year.
SoftBank is offering 95.5 million U.S. shares of the Cambridge, U.K.-based company for $47 to $51 each and aims to raise up to $4.87 billion at the top of the range, a filing filing Tuesday revealed.
The recent deal to acquire the 25% stake in Arm that it didn’t already own from its Vision Fund unit had valued the company at $64 billion.
The Japanese conglomerate will own 90.6% of Arm common stock after the offering closes, the company said in a filing.
Arm’s return to the public markets will be a milestone for SoftBank as it taps several big tech names as investors in the company whose designs power more than 99% of the world’s smartphones.
The listing is expected to boost the IPO market globally and encourage other startups to move forward with their offerings, as Arm’s success signals the return of investor interest in high-growth technology companies.
Reuters first reported Saturday on SoftBank’s proposed IPO price range. Sources also said it could potentially increase this range ahead of IPO pricing should investor demand prove strong.
Arm has signed up many of its big customers as investors in its IPO, Reuters reported Friday, including Apple, Nvidia, Alphabet, Advanced Micro Devices, Intel and Samsung Electronics.
SoftBank’s current offering reflects a drop in valuation for Arm from last month’s Vision Fund deal, but interest in the IPO remains robust, fueled by its clients’ desire to expand their commercial relationship with Arm and make sure rivals don’t get an edge. Reuters reported earlier.
Arm, whose impressive customer base includes the world’s largest technology giants, generates a large portion of its revenue through royalties based on the average retail price of the customer’s Arm-based chip, or a fixed amount per chip.
For the year ended March 31, Arm’s revenue fell to $2.68 billion, primarily due to a slump in global smartphone shipments.
Barclays, Goldman Sachs, JPMorgan Chase and Mizuho Financial Group are the lead underwriters for the offering.
Arm, which has approached a total of 28 banks for the IPO, has not opted for a traditional lead-left bank and will split underwriters’ fees evenly among the four largest banks.
Arm expects to trade on the Nasdaq Global Select Market under the symbol “ARM”.
(Reporting by Manya Saini in Bengaluru; Editing by Arun Koyyur)
