Chip designer Arm Holdings Plc (ARM.O) secured a $54.5 billion valuation in its U.S. initial public offering (IPO) on Wednesday, seven years after its owner SoftBank Group Corp (9984.T) took the company private for $32 billion.
The IPO represents a climb-down from the $64 billion valuation at which SoftBank last month acquired the 25% stake it did not already own in the company from the $100 billion Vision Fund it manages.
Yet even with this lower valuation, SoftBank fares better than its $40 billion deal to sell Arm to Nvidia Corp (NVDA.O), which it abandoned last year amid opposition from antitrust regulators.
Arm priced its IPO at $51 per share, at the top of its indicated range, raising $4.87 billion for SoftBank based on 95.5 million shares sold, the company said on Wednesday. Reuters first reported on Arm's decision on the pricing.
Arm's shares are scheduled to start trading in New York on Thursday.
Arm has already signed up many of its major clients as cornerstone investors in its IPO, including Apple (AAPL.O), Nvidia, Alphabet (GOOGL.O), Advanced Micro Devices (AMD.O), Intel (INTC.O) and Samsung Electronics (005930.KS).
Weak mobile demand during a global economic slowdown has caused Arm's revenue to stagnate. Overall sales totaled $2.68 billion in the 12 months to the end of March, compared to $2.7 billion in the prior period.
Arm also told investors its royalty fees, which account for most of its revenue, were accumulating since it started collecting them in the early 1990s. Royalty revenue came in at $1.68 billion at the latest fiscal year, up from $1.56 billion a year before.
An area of scrutiny for investors has been Arm's exposure to China, given geopolitical tensions with the United States that have led to a race to secure chip supplies. Sales in China contributed 24.5% of Arm's $2.68 billion revenue in fiscal 2023.
