Cambridge-headquartered chip designer Arm is targeting a valuation of up to $52bn (£41bn) in its upcoming initial public offering (IPO) in New York, the company said today.
Arm, which is owned by Japanese tech giant Softbank, said it is selling 95.5m shares, with the possibility to sell 7m more if needed, with the price expected to fall between $47 (£37.5) and $51 (£40.6) per share.
Anchor investors such as Nvidia, Intel, TSMC, Apple and Amazon plan to secure up to $735m of Arm shares at the IPO price, the semiconductor firm said.
Arm, which recently announced a float on New York’s Nasdaq as “ARM”, licenses its chip designs to tech giants like Apple, Nvidia, and Qualcomm.
Raine Securities is acting as financial advisor for Arm during the IPO process, while Barclays, Goldman Sachs, JP Morgan and Mizuho are all book-running managers.
It is set to be the largest US IPO float in two years, after the chip firm shunned a London listing.
Following the IPO, expected to wind up next week, Softbank will still own over 90 per cent of Arm which it bought for $32bn in 2016.
“The price range set by Softbank and its army of bankers and advisers for ARM of $47 to $51 a share implies a total market capitalisation for the business of $47 billion to $51 billion (since it has a billion shares in issue) with its $2 billion net cash pile on top,” explained AJ Bell investment director Russ Mould.
“That gives an enterprise value (EV), or total value for the business of $49 billion to $53 billion, and it is now the job of investors to decide whether that is fair price or not,” he added.