The IPO Buzz: SoftBank’s Arm Files Terms for $4.68 Billion IPO – Largest of 2023

SoftBank Group’s Arm Holdings Ltd. (ARM proposed) showed its IPO cards early today: 95.5 million American Depositary Shares (ADS) at a price range of $47.00 to $51.00 to raise $4.68 billion ($4,679.5 million) in what will be the biggest IPO of 2023, according to its F-1 filing dated Sept. 5, 2023. If Arm prices its IPO at the $49.00 mid-point of that range, the British chip CPU designer would have a valuation of about $50.28 billion. Each ADS represents one ordinary share.

Barclays, Goldman Sachs, J.P. Morgan and Mizuho are the lead joint book-runners.

The IPO roadshow is set to begin today (Tuesday, Sept. 5, 2023) with pricing next week – Wednesday night, Sept. 13, 2023, to trade Thursday, Sept. 14, on the NASDAQ.

Advanced Micro Devices, Apple, Google, Intel, NVIDIA and Samsung Electronics are among 10 cornerstone investors indicating interest in buying an aggregate of up to $735 million of ADS – or about 15.7 percent of the IPO, according to the prospectus. Cadence Design Systems, MediaTek’s affiliated entities, Synopsys and TSMC Partners round out the list of cornerstone investors.

The number of shares in the IPO – 95.5 million – equals less than 10 percent of Arm’s outstanding shares. That percentage reflects the preference of SoftBank Group’s Chairman Masayoshi Son, according to The Wall Street Journal.

Arm’s IPO will be the biggest initial public offering since EV maker Rivian (RIVN) went public in November 2021. Its estimated IPO proceeds will exceed the $3.8 billion raised by Johnson & Johnson’s spinoff Kenvue (KVUE) this spring.

Arm, based in Cambridge, England, says its chip CPUs are used in more than 99 percent of the world’s smartphones, the prospectus says.

For the fiscal year ending March 31, 2023, Arm earned net income from continuing operations of about $524 million on revenue of about $2.68 billion, the prospectus says.

Stay tuned.

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Disclosure: Nobody on the staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums) is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.