Arm Targets More Than $52 Billion Valuation in Largest IPO of the Year

livemint.com:

British chip designer Arm Ltd. is targeting a valuation of more than $52 billion from what is expected to be the largest initial public offering this year, according to the company’s latest regulatory filing. SoftBank Group, Arm’s owner, plans to sell roughly 10% of the total shares outstanding, setting a share sale price of between $47 to $51 apiece.

The Securities and Exchange Commission filing comes as Arm’s management hits the road starting Tuesday to meet with prospective investors to solicit support for the offering. The offering, expected to be the largest of the year, is an important test case for the sustainability of the recent revival in the IPO market because of its considerable size. It will follow the successful, but smaller issues, in June by restaurant chain Cava Group and in July by Oddity Tech, a direct-to-consumer seller of makeup brands.

Several technology companies, many of which are Arm customers, have indicated that they could buy a total of $735 million worth of stock in the offering, according to Tuesday’s filing. That would represent a tiny fraction of the chip designer’s expected value. Still, it could signal a vote of confidence in the business for other institutional investors that might consider participating in the IPO.

Advanced Micro Devices, Apple, Intel, Nvidia and Samsung Electronics are among the companies that plan to buy shares in the IPO, according to the filing. Arm’s target valuation of $48 billion to more than $52 billion is slightly lower than the $50 to $55 billion range reported by The Wall Street Journal last week. The range also falls short of the $64 billion value implied by SoftBank’s recent deal to buy the remaining 25% stake in Arm from its Vision Fund unit.