SoftBank's Arm Holdings files for biggest IPO of 2023

In what is seen as the biggest US initial public offering of the year, SoftBank Group Corp.’s Arm Holdings Ltd. has applied for a Nasdaq listing. The U.K.-based company filed confidentially for a listing in the U.S. earlier this year after previously announcing it would go public in the U.S. over the U.K., dealing a blow to the London Stock Exchange. 

In a regulatory filing, Arm said that the IPO is being led by Barclays Plc, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Mizuho Financial Group Inc. The document also listed 24 other underwriters but Morgan Stanley is notably absent.

According to a news report, Arm is planning to start its roadshow in the first week of September and the price of the IPO the following week. The proposed terms of share sale are not disclosed in the document by Arm. It is expected that the company may seek a valuation of $60 billion to $70 billion.

While Arm had been aiming to raise $8 billion to $10 billion in the IPO, that target could be lower since SoftBank has decided to hold onto more of the company after buying Vision Fund’s stake in it. That transaction valued Arm at more than $64 billion, based on the filing.

Even so, the offering promises to give the struggling IPO market its biggest lift in almost two years.

As per the filing, after Arm begins trading, SoftBank will remain the key shareholder of the company. SoftBank has acquired substantially all of the Vision Fund’s 25% stake in Arm for $16.1 billion, according to the filing.

Arm, based in Cambridge, UK, plans for its shares to trade on the Nasdaq Global Select Market under the symbol ARM. The filing confirms that the IPO’s top four banks will be acting as joint bookrunning managers of the offering. The news source has reported that the four will get an equal share of the fees, breaking with standard practice.

In the filing, Arm called itself an “engineering-first company," with 4,753 of its workers — or about 80% of global employees — focused on research, design and technical innovation. The company said its owns or co-owns about 6,800 issued patents and has approximately 2,700 patent applications pending worldwide, many of which are relevant to the key technologies used in many of the chips manufactured today.