Major technology companies, including Apple, Nvidia, Alphabet, and Advanced Micro Devices (AMD), have reportedly agreed to invest in Arm Holdings Ltd’s initial public offering (IPO). Other investors include Intel, Samsung Electronics, Cadence Design Systems, and Synopsys.
While discussions are still ongoing, some potential investors are in talks to participate in the IPO.
Arm’s IPO valuation target $50 Billion – $55 Billion
SoftBank Group, which owns Arm, is aiming for a valuation between $50 billion and $55 billion. Arm’s clients have agreed to invest in this valuation range.
However, it’s worth noting that the IPO’s demand could potentially lead to a higher valuation at the time of pricing.
This valuation target represents a decrease from the $64 billion valuation at which SoftBank acquired the 25% stake in Arm it didn’t already own from its Vision Fund last month.
Apple, Nvidia, and other strategic investors have committed to investing between $25 million and $100 million each in the IPO.
Arm and SoftBank have reserved 10% of the IPO shares for their clients.
Amazon, which had been in discussions to invest in the IPO, has reportedly decided not to participate.
This move by Arm’s clients to invest in the IPO reflects their interest in expanding their commercial relationship with Arm and preventing rivals from gaining an advantage.
While these investments won’t grant the investors seats on Arm’s board or influence over its strategy, they are expected to strengthen ties with Arm and make it more challenging for competitors to acquire the company in the future.
Arm and SoftBank have not yet responded to requests for comment, and some of the companies mentioned declined to comment as well.