SoftBank’s Arm aims for over $52 billion valuation in biggest US IPO of the year

SoftBank Group’s Arm is aiming for a valuation of more than $52 billion in its initial public offering, making it the year’s largest stock market debut.

According to a regulatory filing on Tuesday, SoftBank (TYO:9984) is issuing 95.5 million American depository shares of the Cambridge, United Kingdom-based company for $47 to $51 a share, with the goal of raising up to $4.87 billion at the top of the range.

Its recent transaction to acquire the remaining 25% ownership in Arm from its Vision Fund unit valued the company at $64 billion.

After the deal concludes, the Japanese conglomerate will possess 90.6% of Arm’s ordinary shares, according to the business.

SoftBank will mark the return of Arm to the public markets by enlisting some famous technology names as investors in the business whose designs power more than 99% of the world’s cellphones.

The listing is likely to boost the global IPO market and encourage other firms to press forward with their listings, as Arm’s success marks a resurgence of investor interest in high-growth technology companies.

SoftBank’s suggested IPO price range was first published by Reuters on Saturday. According to sources, if investor demand is great, the price range could be raised before the IPO.

SoftBank’s current range represents a reduction in Arm’s valuation from last month’s Vision Fund acquisition, but interest in the IPO remains strong, fuelled by its clients’ desire to grow their commercial relationship with Arm and ensure rivals do not gain an advantage, as previously reported by Reuters.

Arm produces a large portion of its revenue from royalty payments depending on either the average selling price of the customer’s Arm-based chip or a fixed cost per chip. Its remarkable client roster includes the world’s largest IT heavyweights.

Arm’s sales declined to $2.68 billion in the fiscal year ending March 31, primarily due to a drop in global smartphone shipments.