Arm Holdings, the UK-based semiconductor designer, has outlined its plans for an initial public offering (IPO) in the United States, with the goal of raising up to $4.87 billion and achieving a valuation of up to $52.3 billion.
IPO Details:
- Arm intends to offer 95.5 million American depositary shares (ADS) in the IPO.
The expected pricing range for each ADS is set between $47 and $51. - The stock will be listed on the Nasdaq under the ticker symbol “ARM,” with each ADS representing one ordinary share.
- Following the IPO, there will be a total of 1.03 billion ordinary shares outstanding.
This IPO pricing would value Arm at an estimated range of $48.23 billion to $52.33 billion.
Lead Underwriters:
- Barclays, Goldman Sachs, JPMorgan, and Mizuho are the lead underwriters for the IPO.
Timing and Investor Interest:
- Arm is going public at a time when investor interest in IPOs remains strong. The Renaissance IPO ETF has gained 6.6% over the past three months, outperforming the S&P 500, which has gained 5.7%.
Background:
- Last year, Nvidia’s attempted $40 billion acquisition of Arm was unsuccessful, and Nvidia
- paid a $1.36 billion breakup charge after the US Federal Trade Commission blocked the deal. Nvidia also secured a 20-year license to Arm’s technology for $750 million.
- Arm Holdings, owned by Japan’s SoftBank Group, is known for its chip architecture and technology.
- Arm’s IPO is anticipated to be one of the largest of the year, with reported efforts to raise $8 billion to $10 billion at a valuation of $60 billion to $70 billion.
- Tech giants such as Amazon.com, Intel Corp, and Nvidia are reportedly among the potential anchor investors.
Arm’s Importance in the Semiconductor Industry:
- Arm’s architecture differs from the traditional x86 architecture pioneered by Intel.
The company has shipped over 250 billion Arm-based chips since its inception in 1990, with 30.6 billion chips shipped in fiscal 2023. - Arm plays a crucial role in AI and machine learning, running workloads in billions of devices, including smartphones, cameras, cars, and data centers.
- Arm collaborates with notable companies like Alphabet, GM’s Cruise, Mercedes-Benz, Meta Platforms, and Nvidia to deploy its technology for AI workloads.
Arm’s IPO is expected to be a significant event in the semiconductor industry, reflecting the growing importance of AI and machine learning in computing.
