Arm updates IPO filing with reduced valuation

News | September 5, 2023

By Peter Clarke

Processor intellectual property licensor Arm Ltd. (Cambridge, England) has said it expects to sell 95.5 million shares in the company at a target price of between US$47 and US$51 per share.

It did this via an updated IPO filing with the Securities Exchange Commission.

This values the company between $50 billion and $54 billion, a high multiple of its annual sales, but lower than a previous valuation put on the company of US$64 billion.

At the high end of the range this would allow parent company SoftBank Group Corp. to raise $4.87 billion, again considerably lower than the US$8 billion to US$10 billion it had previously been reported to be targeting. The sale of 95.5 million shares would leave SoftBank with about a 90 percent stake in the company.

As recently as August SoftBank paid US$16.1 billion to acquire 25 percent of Arm from its Vision Fund, valuing Arm at US$64 billion.

The updated filing confirmed that several of Arm’s customers have agreed to buy shares. These include: Apple, Google, AMD, Cadence, Intel, MediaTek, Nvidia, Samsung, Synopsys and TSMC. Qualcomm is a notable absentee from the list. The consortium will purchase up to an aggregate of $735 million worth of shares, the filing said.

The share price range is an estimate and could change before the offer is finalized. The price is expected to be finally fixed on September 13 with the shares being open for trading on September 14 on Nasdaq.

Arm was purchased by SoftBank Group in 2016 for US$32 billion and tried to sell the company to Nvidia in 2020 for US$40 billion. The deal was called off due to a lack of regulatory support.