The microprocessor firm Arm has set an indicative price for its IPO. The company, controlled by the Japanese group Softbank, will place its shares at a price between $47 and $51 per share, according to the updated prospectus. Since the company has 1,025.2 million shares, that implies a valuation between 48,222 and 52,326 million dollars (44,900 to 48,700 million euros, at the current exchange rate). The implicit valuation would be somewhat higher if the shares pending to be issued for different concepts, such as executive compensation, are taken into account. Apple, Intel, Nvidia and Google, among others, plan to invest in the operation, according to the company.
The valuation is somewhat lower than what was initially considered under an internal operation by the Softbank group that valued the company at around $64 billion. The company already warned then that said transaction responded to previous contractual agreements and did not imply that it would be the one used in the IPO. The price band set now is indicative and non-binding and it will be the demand prospecting period that will allow us to know the appetite for investing in Arm in the market and, consequently, set the final price. It is expected to do so on September 13 and begin trading on the 14th.
Softbank, which currently controls 100% of the company, initially places 95.5 million securities, equivalent to 9.4% of the capital. This figure may increase by another 7 million shares if demand is sufficient and the planned oversubscription option is exercised, in which case it would amount to almost 10% of the capital. The Japanese group would thus obtain a maximum of just over $5.2 billion from the sale of its securities.
SoftBank paid $32 billion to acquire Arm in 2016. Then, pressure from regulators frustrated the company’s sale to Nvidia, agreed in 2020 for $40 billion. In March 2022, when that operation failed, Softbank announced that it would list the microchip giant on the stock market with a valuation of more than 50,000 million “within the fiscal year ending March 31, 2023,” although the operation was has delayed. Now, try to take advantage of the investment fever for securities related in one way or another to artificial intelligence.
Arm’s microprocessor designs are used by large companies in the sector to produce chips. Intel, AMD, Nvidia and Qualcomm, among others, take advantage of the designs of the British technology company to develop their products. The company estimates that “approximately 70% of the world’s population uses Arm-based products,” according to the operation’s prospectus. Thanks to the low energy consumption and the power of the chips it designs, its position in the market for processors that power a smartphone is a practical monopoly.
Several of Arm’s clients have expressed interest in investing in the IPO. Advanced Micro Devices (AMD), Apple, Cadence Design Systems, Google, Intel, MediaTek, Nvidia, Samsung, Synopsys and TSMC Partner “have expressed, separately and not jointly, their interest in acquiring up to a total of $735 million in ADSs (share equivalent certificates) offered in this initial public offering,” Arm says in the prospectus. There are no binding commitments and no breakdown of how much each company will invest. The purchase of the shares will be made at the same price as the offer, always according to the prospectus.
The electric vehicle manufacturer Rivian starred in its stock market debut valued at nearly $70 billion in November 2021 with the last major public offering in the United States, for an amount of about $13.7 billion. Even at the bottom of the price range, the listing would still be the largest in the world this year, surpassing the $4.37 billion IPO of Kenvue, Johnson & Johnson’s consumer health subsidiary.
Barclays, Goldman Sachs, JP Morgan and Mizuho act as global coordinators of the operation, in which another 24 banks act as underwriters and underwriters, including the Spanish Banco Santander, which is one of the main underwriters through its subsidiary Santander. US Capital Markets.
Follow all the information about Economy and Business on Facebook and Twitteror in our weekly newsletter
The Five Day Agenda
The most important economic quotes of the day, with the keys and context to understand their scope.
RECEIVE IT IN YOUR MAIL
#Apple #Google #Intel #Nvidia #plan #invest #IPO #microprocessor #firm #Arm