ARM Holdings IPO Values Firm At £43.6 Billion

ARM Holdings has secured a $54.5bn (£43.6bn) value ahead of its eagerly anticipated return to the stock market later on Thursday.

The British chip designer is of course owned by Japan’s SoftBank Group and its shares will start trading on the Nasdaq in New York, after it opted not to do a dual listing in London and New York, like it had prior to its acquisition by SoftBank in 2016.

ARM is major supplier of chip designs for nearly all the smartphones in the world. It was revealed last week that ARM had entered into a “new long-term agreement with Apple that extends beyond 2040.”

Anchor investors

Also last week ARM signed up many of its major clients as investors in its IPO, including the likes of Apple, Nvidia, Alphabet, Advanced Micro Devices, Intel, Samsung Electronics, Cadence Design Systems and Synopsys.

These strategic investors have agreed to invest between $25 million and $100 million each in the blockbuster IPO.

ARM had spent months courting potential ‘anchor investors’ for its IPO, and there had been strong uptake due in part to tech firms seeking to expand their commercial relationship with ARM because of its unique importance in the tech sector.

And now as part of its listing, high demand from investors meant SoftBank was able to sell the 95.5 million ARM shares on offer – a 9.4 percent stake – at the top end of a lowered price range, $51 (£41) per share.

This makes ARM the most valuable company to list in New York since Rivian Automotive listed on the public markets back in November 2021.

Lower value

But there is no disguising the fact that the new valuation represents a climb-down from the $64 billion valuation, at which SoftBank acquired the 25 percent stake in the company it did not already own from its Vision Fund last month.

SoftBank had previously been in talks to list ARM at a valuation of $60bn to $70bn.

However the current valuation is better than the $40bn (£32bn) SoftBank would have achieved through a sale of ARM to Nvidia that was abandoned last year following significant opposition from the tech industry and the British government.

Eagerly awaited

ARM in early May had registered for a US public listing with the US Securities and Exchange Commission.

The registration had rebuffed the charm offensive from a number of British Prime Ministers to get the firm to consider a dual listing in both the US and UK.

ARM said at the time it would sell its shares on Nasdaq and sought to raise $8 billion-$10 billion.

Now by selling 95.5 million shares, SoftBank will raise $4.87bn (£3.9bn).

Share trading is due to begin at 2.30pm UK time and an opening price will be declared sometime later.