SoftBank lines up Apple, Nvidia as strategic Arm IPO backers
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SoftBank has been in discussions with Arm customers and partners for months, but the plans are just being finalised now.
PHOTO: REUTERS
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SoftBank Group has lined up some of Arm’s biggest customers as strategic investors for the chip company’s initial public offering, including Apple, Nvidia, Intel and Samsung Electronics, according to people familiar with the situation.
The investors also include Advanced Micro Devices, Cadence Design Systems, Alphabet’s Google, Synopsys, among others, said the people, who asked not to identified because the details have not been announced.
SoftBank has been in discussions with Arm
The investors will put in amounts ranging from US$25 million (S$33.9 million) to US$100 million, according to the sources.
The show of support from some of the tech industry’s biggest names will help bolster the offering, which is expected to raise US$5 billion to US$7 billion. SoftBank, which acquired Arm in 2016, was previously aiming to value the chip business at US$60 billion to US$70 billion.
Softbank will seek US$47 to US$51 per share in the IPO, the people said. That share-price range was reported earlier by Reuters.
Representatives from AMD, Arm, Google, Nvidia and Synopsys declined to comment. Apple, Cadence, Intel and Samsung did not immediately respond to requests for comment.
SoftBank is capitalising on investor interest in the chip industry, which has benefited from spending on artificial intelligence equipment. The Philadelphia Stock Exchange Semiconductor Index has rallied in 2023, far outpacing the S&P 500 Index and other major indexes.
Arm provides chip designs and licenses technology that is a crucial part of the more than 1 billion smartphones sold every year. In recent years, it has tried to spread its reach into new areas, including computers used in data centres, seeking to be part of higher-priced electronic components.
Arm is considering pricing its shares on Sept 13, and the stock will start trading the next day, Bloomberg reported earlier. The roadshow to promote the offering is expected to come after the US Labour Day holiday on Monday.
Initially, Arm was looking to raise US$8 billion to US$10 billion, but the target was lowered after owner SoftBank decided to hold on to more of the company – a move that involved buying Vision Fund’s stake in the chip designer. That transaction valued the chip company at more than US$64 billion.
A successful debut by Arm would be a boon for SoftBank Chief Executive Officer Masayoshi Son, whose Vision Fund lost a record US$30 billion last year. It could also spur dozens of companies to pursue their own IPO plans. Online grocery-delivery firm Instacart, marketing and data automation provider Klaviyo, and footwear maker Birkenstock are all working on their own offerings.
Mr Son does not want to part with more than 10 per cent of the company at this point, Bloomberg has reported.
Arm, based in Cambridge, England, has assembled a lengthy roster of underwriters for the IPO, reflecting both the company’s global reach and banks’ eagerness to land roles on big-ticket deals in a slow listings market. Barclays, Goldman Sachs Group, JPMorgan Chase & Co. and Mizuho Financial Group are leading the offering. BLOOMBERG
