Arm to raise $4.7B in IPO that values chip designer at $54.5 billion
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Arm Holdings, the chip architecture firm owned by SoftBank Group, is poised to raise about $4.7 billion in its initial public offering that valued the company at more than $54.5 billion.
Reuters reported earlier that the IPO was oversubscribed by six times. As such, the company is in a position to break the ice in the IPO market, with hopes that a rally could open the window for other companies to do the same. Yet Masayoshi Son, CEO of SoftBank, reportedly decided the $51 a share price for the 95.5 million shares going up for sale on Thursday was prudent.
SoftBank itself had hoped for a higher valuation, as last month SoftBank acquired the 25% share of Arm that it did not own in the company at a $64 billion valuation.
Cambridge, United Kingdom-based Arm chose to go public in the U.S., creating demand for the largest IPO in U.S. in the past two years. The company has a 99% market share in mobile phones, and it has made incursions into markets such as processors for PCs and servers. Arm’s devices are always energy efficient, as the company’s architecture is a descendant of RISC computing, which focused on energy efficiency while Intel’s rival architecture focused more on performance.
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