SoftBank’s Arm Holdings files IPO papers; expected to be the largest US public offering in 2023
Arm Holdings Ltd., a subsidiary of SoftBank Group Corp., is about to list on the American stock market and is expected to be the largest initial public offering (IPO) of the year in the US.
According to the company’s regulatory filing, Barclays Plc, Goldman Sachs Group Inc., JPMorgan Chase & Co., and Mizuho Financial Group Inc. are leading the offering. 24 more underwriters were mentioned in the file after the top tier names.
SoftBank will benefit greatly from Arm Holdings’ IPO since its affiliate Vision Fund lost close to $30 billion.
In its regulatory filing, the business did not specify the planned conditions for the share sale, although it is expected to anticipate a value of $60 billion to $70 billion. It is anticipated that the roadshow would begin in the first week of September of this year.
According to the filing, Arm planned to raise between $8 billion and $10 billion via the IPO, which gave the company a $64 billion valuation. The IPO is anticipated to be the biggest in the US since the $13.7 billion sale by electric car manufacturer Rivian Automotive Inc. in October 2021.
The $25 billion IPO of Alibaba Group Holding Ltd. from 2014 and the $16 billion debut of Meta Platforms Inc., formerly Facebook Inc., in 2012 are the two biggest IPOs in the IT sector, respectively.
According to a Bloomberg article, Arm also discussed supporting the IPO with some of its largest clients. The Arm IPO also expected to be the first major boost to the US IPO market in over two years.
According to Kyle Stanford of PitchBook, who was cited by Bloomberg, “A strong performance from Arm will not only be a major windfall for SoftBank but also reinforce its AI strategy by showing the market hype around AI hasn’t waned.”
Arm sells the schematics required to create microprocessors and licenses the instruction set technology that specifies how software interacts with those devices. Arm’s technology is widely used in smartphones, where battery life is crucial, because to its power economy.
The business wants to diversify outside the smartphone industry, which has apparently plateaued in recent years.
After Arm starts trading, SoftBank will still maintain a majority stake in the company, according the filing. For $16.1 billion, Tokyo-based SoftBank bought almost the whole 25% share in Arm held by the Vision Fund.
The papers also revealed that Arm’s income dropped by around 1% during its most recent fiscal year. According to the report, the company’s revenues decreased to $2.68 billion for the fiscal year that ended on March 31.
