(Bloomberg) — SoftBank Group Corp. has lined up some of Arm Ltd.’s biggest clients, including strategic investors Apple Inc., Nvidia Corp., Intel Corp. and Samsung Electronics Co., in an initial public offering for the chip company. According to people familiar with the situation.
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The investors also include Advanced Micro Devices Inc., Cadence Design Systems Inc., Alphabet Inc.’s Google, Synopsys Inc. and others, said the people, who asked not to be identified because the details have not been disclosed. SoftBank has been in discussions with ARM customers and partners for months, but the plans are now being finalized. Still, that distinction could change as the company nears its IPO, which is expected to feature an investor roadshow next week.
The investors will put in between $25 million and $100 million, the people said.
The support from prominent figures in the technology sector will help bolster the endowment, which is expected to reach between $5 billion and $7 billion. In the year SoftBank, which bought Arm in 2016, had previously valued the chip business at $60 billion to $70 billion, but the figure could be higher at $50 billion to $60 billion, according to Bloomberg.
Representatives for AMD, Arm, Google, Nvidia and Synopsys declined to comment. Apple, Cadence, Intel and Samsung did not immediately respond to a request for comment.
SoftBank is gaining interest from investors in the chip industry as it spends on artificial intelligence tools. The Philadelphia Stock Exchange’s Semiconductor Index has rallied this year, far outperforming the S&P 500 Index and other major indexes.
ARM provides chip design and licensing technology that is an integral part of the more than 1 billion smartphones sold each year. In recent years, it has sought to expand its reach into new areas, including computers used in data centers, seeking to become part of high-value electronic components.
Arm is planning to issue its shares on September 13, and the stock will start trading the next day, Bloomberg reported earlier this week. A road show to promote the offering is expected to come on Monday after the US Labor Day holiday.
Arm initially wanted to raise $8 billion to $10 billion, but that target was scaled back after owner SoftBank decided to take more of the company — a move that included the Vision Fund buying a stake in the chip designer. That transaction valued the chip company at more than $64 billion.
A successful debut at Arm will be a boon for SoftBank CEO Masayoshi Son, whose Vision Fund lost a record $30 billion last year. It could also prompt dozens of companies to raise their own IPO plans. Online grocery-delivery firm Instacart Inc., marketing and data automation provider Clavio and shoemaker Birkenstock are all working on their own offerings.
Son doesn’t want to part with more than 10% of the company at this point, Bloomberg reported.
Arm, based in Cambridge, England, has assembled a long list of underwriters for the IPO, reflecting the company’s global reach and banks’ interest in big-ticket deals in a slow listing market. Barclays Plc, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Mizuho Financial Group are leading the offering.
–With assistance from Mark Gurman and Davey Alba.
(Updates with more on the IPO starting in Article Eight.)
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