(New York) The British microprocessor champion Arm, a subsidiary of Japanese SoftBank, has officially launched its IPO process on Wall Street, an operation which could become the most important in technology since that, pharaonic, of Chinese Alibaba.
While “the number of shares and price range are yet to be determined,” according to a Monday statement, documents released by the group confirm that SoftBank Group recently purchased Arm’s 25% stake for some $16.1 billion. which were held by its Vision Fund unit.
That values the entire company at more than $64 billion, roughly double the price of its 2016 acquisition by the Japanese group.
The initial public offering (IPO) could take place in September, according to the press, and it could be the largest transaction of its kind this year, and one of the largest in the “tech” sector. since Alibaba’s Wall Street in 2014, which then brought in $25 billion.
According to preliminary IPO documents filed with the US Stock Exchange (SEC) on Monday, “Semiconductor technology has become one of the world’s most critical resources because it enables all electronic devices to work today”.
The company is a world reference in the architecture of semiconductors subsequently manufactured under license for almost the entire global smart phone market.
Its processors have “delivered advanced computing to more than 99% of smartphones worldwide” by 2022, it says, also estimating that “about 70% of the world’s population uses Arm-based products. and that the reach of the company continues to expand.
The documents filed Monday by Arm aim to provide precise information on the group’s financial situation before specifying the price per share and the share of capital that will be open to investors.
Although based in the United Kingdom, Arm announced in early March its intention to carry out its IPO in the United States, to the chagrin of the London financial center where it was listed until 2016.
The formalization of the transaction “will reinforce the disappointment that London was shunned”, while the company “was widely considered a British success story”, but “SoftBank is not in sentiment and wants its money’s worth” , said Susannah Streeter, an analyst at Hargreaves Lansdown.
However, the company will keep its headquarters in Cambridge and could subsequently consider a second listing on the London Stock Exchange.
Founded in 1990, Arm has been owned by SoftBank Group since 2016. The Japanese investment giant announced its intention to relist Arm after the failure in early 2022 of the sale of Arm to the American Nvidia due to ” significant regulatory hurdles”.
“The Japanese conglomerate has been waiting for the best market conditions and while they seem a bit more lenient compared to the volatility that hit the tech sector last year, recent summer weakness is clearly pushing the company to list Arm the as soon as possible,” according to Ms. Streeter.
SoftBank’s $60+ billion valuation wasn’t obvious until earlier this year, but now looks achievable as the global tech industry rides on intelligence euphoria generative artificial intelligence, an area in which Arm intends to play a strategic role.
“The AI boom, led by companies like Nvidia and services like ChatGPT, which is expected to drive higher demand for advanced AI-related chips and chip architectures, will benefit Arm.” early August analyst Douglas Kim in a note on the Smartkarma platform.
Many tech giants such as Nvidia, Apple, Samsung Electronics and Intel would be in line to invest in Arm once the company is listed, according to the press.
SoftBank Group is counting heavily on the IPO of Arm to restore its image after having experienced many disasters in its investments in recent years, such as the American giant of shared offices WeWork.