SoftBank recruits Apple, Nvidia and Intel as strategic investors for Arm’s IPO as the chipmaker rides the AI wave
SoftBank CEO Masayoshi Son is a major influence on Arm’s IPO. Mark Kauzlarich/Bloomberg via Getty Images
According to insiders, SoftBank Group Corp. some of Arm Ltd’s biggest customers won as strategic investors for the chip company’s IPO, including Apple Inc., Nvidia Corp., Intel Corp. and Samsung Electronics Co. the situation.
Investors also include Advanced Micro Devices Inc., Cadence Design Systems Inc., Alphabet Inc.’s Google and Synopsys Inc., among others, said the people, who asked not to be named because the details were not yet released . SoftBank has been in discussions with Arm customers and partners for months, but plans are only just being finalized. Still, the details could change as the company gets closer to its IPO, whose investor roadshow is expected to begin next week.
According to the information, the investors will invest amounts between 25 and 100 million US dollars.
Support from some of the biggest names in tech will help bolster the offering, which is expected to bring in $5 billion to $7 billion. SoftBank, which acquired Arm in 2016, previously targeted the chip deal at $60 billion to $70 billion, but the number could be closer to $50 billion to $60 billion, according to Bloomberg.
Supply could be at the lower end of that range, Reuters reported on Saturday. According to Reuters, Softbank is targeting $47 to $51 per share when it goes public, valuing Arm between $50 billion and $54 billion.
Representatives from AMD, Arm, Google, Nvidia and Synopsys declined to comment. Apple, Cadence, Intel and Samsung did not immediately respond to requests for comment.
SoftBank is benefiting from investor interest in the chip industry, which has benefited from spending on artificial intelligence devices. The Philadelphia Stock Exchange Semiconductor Index has advanced this year, far outperforming the S&P 500 Index and other major indices.
Arm provides chip designs and licenses technologies that make up a crucial portion of the more than 1 billion smartphones sold each year. In recent years, the company has tried to expand its reach into new areas, including computers used in data centers and attempted to be a part of higher-priced electronic components.
Arm is considering pricing its shares on Sept. 13, and the stock will begin trading the next day, Bloomberg reported earlier this week. The roadshow promoting the offer is expected to take place after US Labor Day on Monday.
Arm initially wanted to raise $8 billion to $10 billion, but the target was lowered after owner SoftBank decided to keep a larger part of the company — a move that involved buying Vision Fund’s stake in the chip designer. As a result of this transaction, the chip group was valued at more than 64 billion US dollars.
A successful debut from Arm would be a boon for SoftBank chief executive officer Masayoshi Son, whose Vision Fund suffered a record $30 billion loss last year. It could also prompt dozens of companies to pursue their own IPO plans. Online grocery delivery company Instacart Inc., marketing and data automation provider Klaviyo, and shoemaker Birkenstock are all working on their own offerings.
According to Bloomberg, Son doesn’t want to divest more than 10% of the company at this point.
Arm, based in Cambridge, England, has assembled an extensive roster of underwriters for the IPO, reflecting both the company’s global reach and the willingness of banks to land big deal roles in a slow-to-list market. Barclays Plc, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Mizuho Financial Group are leading the offering.
– With support from Mark Gurman, Davey Alba and Ellie Harmsworth
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