Arm Holdings plans to raise $4.87 billion in world’s largest IPO this year

The phone-chip designer Arm Holdings Ltd., owned by SoftBank Group Corp., is preparing for a public offering that could raise up to $4.87 billion, according to a filing with the US Securities and Exchange Commission on Tuesday.

The company plans to sell 95.5 million American depositary shares at $47 to $51 each, valuing it at about $54.5 billion at the high end of the range.

The underwriters have the option to purchase up to 7 million more shares.

The IPO, which is expected to price on Sept. 13 and start trading on Sept. 14, would be the biggest in the world this year, surpassing the $4.37 billion listing by Kenvue Inc., a spinoff of Johnson & Johnson’s consumer health unit. It would also mark a milestone for the US IPO market, which has been sluggish since the 2009 financial crisis, especially for tech companies.

Arm is a leading player in the chip industry, providing the designs and technology for most of the world’s smartphones. The company had previously aimed for a valuation of $60 billion to $70 billion, but lowered its expectations after SoftBank’s Vision Fund, which invested in Arm in 2016, suffered a record loss of $30 billion last year.

The company hopes to attract investors with its growth prospects in the emerging fields of artificial intelligence and generative AI, which have boosted the valuation of its rival Nvidia Corp. to $1.2 trillion. Arm also has the support of 10 of its customers, including Apple, Google, Intel and Nvidia, who have agreed to buy up to $735 million worth of shares as cornerstone investors.

The offering is led by Barclays, Goldman Sachs, JPMorgan and Mizuho, along with 24 other banks. Arm will change its name to Arm Holdings Plc and trade on the Nasdaq Global Select Market under the symbol ARM.

Arm was founded in 1990 as a joint venture between Acorn Computers, Apple and VLSI Technology. It went public in 1998 on the London Stock Exchange and Nasdaq, before being acquired by SoftBank for $32 billion in 2016. SoftBank tried to sell Arm to Nvidia for $40 billion last year, but the deal was blocked by regulators and opposed by Arm’s customers. SoftBank then decided to pursue an IPO instead.

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