SoftBank CEO Masayoshi Son against a backdrop illustrating SoftBank Group and the Arm unit in 2016.
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Chip design firm Arm on Tuesday said it’s looking to fetch as much as $4.87 billion in its upcoming blockbuster initial public offering on the Nasdaq stock exchange in Recent York, according to a fresh filing.
The deal could value the corporate at as much as $52 billion.
Arm submitted its updated F-1 filing with the U.S. Securities and Exchange Commission, setting out its ambitions to once more change into a publicly listed company. It was previously dually listed in London and Recent York, before SoftBank acquired it for $32 billion in 2016.
As a British company, Arm qualifies as a foreign private issuer in the U.S. and its shares will count as American depositary shares, or ADSs. The corporate will list 95.5 million ADSs at a price range between $47 and $51. On the upper end of that range, CNBC estimates that Arm will likely raise up to $4.87 billion. On the lower end, the IPO would fetch $4.49 billion of fresh capital for Arm.
When the corporate floats in Recent York, it’ll look to tap right into a deep pool of institutional funds. Arm seeks to ramp up its investments in research and development, particularly because it pursues growth in the synthetic intelligence space with a few of its newer chips. The corporate recently released latest chips specifically targeted at AI and machine learning use cases.
On the upper end of the pricing range, Arm would also attain a complete valuation of $52 billion, according to CNBC calculations. On the lower end, its valuation would come in below $50 billion.
Only 9.4% of Arm’s shares will likely be freely traded on the Nasdaq stock exchange in Recent York, with SoftBank expected to own roughly 90.6% of the corporate’s outstanding shares after the completion of the IPO.
The underwriters for the listing have an option to purchase up to a further 7 million American depositary shares, value $735 million. In the event that they select to purchase these shares, SoftBank’s ownership of Arm will likely be reduced to 89.9%, the corporate said.
Biggest tech IPO of the 12 months
Arm’s listing is ready to be the largest technology IPO of the 12 months. Investors are hoping that the listing could breathe latest life into an IPO market that has largely been frozen over since 2022.
An onset of macroeconomic and geopolitical challenges — from Russia’s invasion of Ukraine to central bank rate of interest hikes — led to an enormous slump in tech valuations last 12 months, which in turn caused technology firms to row back on decisions to list.
Arm sees huge potential revenue opportunity for its technology, which it said in its IPO filing had a complete addressable market (TAM) of $202.5 billion in 2022. The firm sees this rising to $246.6 billion by the tip of the calendar 12 months ending on Dec. 31, 2025 — representing a compound annual growth rate of 6.8%.
Arm says its energy-efficient processor designs and software platforms are integrated into greater than 250 billion chips globally, into products starting from sensors and smartphones to supercomputers.
The corporate estimates it commands an roughly 48.9% share of the marketplace for semiconductor design. Other players, similar to Intel and AMD, have raced to catch up on designing their very own chip architectures, but have struggled to this point.
The U.K. government had originally hoped Arm would list on the London Stock Exchange, but the corporate as a substitute dealt a serious blow to Britain’s ambitions to change into the leading global tech hub by choosing Recent York.
The U.S. financial center has a deep institutional investor base and analysts who’ve an in depth understanding of the technology sector.
Correction: This story has been amended to reflect the proven fact that Arm is listing on the Nasdaq stock exchange in Recent York. A previous version of this story misstated the name of the exchange.