(Reuters) – The chip designer, an arm of SoftBank Group, is seeking a valuation of more than $52 billion in its initial public offering as it heads for what could be the biggest stock market float of the year.
SoftBank, a Cambridge, UK-based company, is offering 95.5 million American depositary shares at a price of $47 to $51 each and aims to raise up to $4.87 billion, a regulatory filing showed on Tuesday.
The Japanese conglomerate’s recent deal to acquire the 25% of ARM it didn’t own from Vision Fund’s unit valued the chip designer at $64 billion.
SoftBank will own 90.6% of Arm’s common stock after the offering closes, it said in the filing.
Returning to the mass market will be a major milestone for SoftBank, as their design leverages several marquee technology names to power more than 99% of the world’s smartphones.
Arm’s success is expected to signal a return of investor appetite for high-growth tech companies, so the listing will dominate the IPO market globally and prompt other startups to continue offering.
Reuters first reported on Softbank’s proposed IPO price range on Saturday. If investor demand is strong, it may raise this before the IPO price, sources said.
Arm signed up many of its major clients as investors in the IPO, including Apple, Nvidia, Alphabet, High Micro Devices, Intel and Samsung Electronics.
SoftBank’s current range reflects a decline in value for Arm from last month’s Vision Fund deal, but interest in the IPO remains strong, driven by its clients’ desire to expand their business with Arm and keep rivals from outperforming.
Arm’s client list includes some of the world’s biggest tech giants. It generates a large portion of its revenue through royalty payments, based on the average selling price of a chip based on the customer’s arm or a fixed fee per chip.
In the year For the year ended March 31, Arm’s sales fell to $2.68 billion, mainly hurt by a decline in global smartphone shipments.
Barclays, Goldman Sachs, JPMorgan Chase and Mizuho Financial Group are the lead underwriters for the offering.
Arm, which used a total of 28 banks for the IPO, did not select a traditional “lead left” bank and paid equal fees among the top four banks.
ARM expects to trade on the Nasdaq Global Select Market under the symbol “ARM”.
(Reporting by Manya Sani in Bengaluru; Editing by Arun Koyur)
