Arm’s customers agree to buy-in to IPO
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Several customers of processor intellectual property licensor Arm Holdings Ltd. (Cambridge, England) have agreed to buy shares in the company, according to Reuters.
The customers include: Apple, Nvidia, Alphabet, AMD, Intel, Samsung, Cadence and Synopsys, who have agreed to buy-in at a share price of between US$47 and US$51, Reuters said referencing unnamed sources. Qualcomm, which is in dispute with Arm over licensing terms, was not listed (see Qualcomm steps up Oryon battle with ARM). It has been reported that the licensees have agreed to buy-in with relatively small amounts ranging from $25 million to $100 million.
The share price range referenced by Reuters may be indicative of what Arm parent SoftBank intends to price the shares. The pricing is expected to happen on September 13 with the shares going on sale on Nasdaq the following day (see SoftBank sets Arm IPO date).
SoftBank reportedly intends to float only about 10 percent of Arm at the IPO. The pricing would enable SoftBank to raise between about US$5 billion to US$5.4 billion while valuing Arm at between US$50 billion and US$54 billion, Reuters said.
This is already lower than the US$64 billion valuation that SoftBank placed on Arm recently when it bought back 25 percent of the company it didn’t own from Vision Fund. However, details change over the next week as a roadshow is being conducted to promote the IPO.
Customers are ready to buy-in to support the IPO as they are dependent on IP from Arm and wish to shore up their relationship. They also don’t want to be at a disadvantage compared with other licensees.
Related links and articles:
Qualcomm steps up Oryon battle with ARM
AI demand drives Nvidia’s booming Q2 results
Analysis: Arm IPO filing reveals depth of Chinese risk
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