SoftBank Group Subsidiary Arm Planning IPO

Semiconductor designer Arm Ltd., a subsidiary of SoftBank Group, is planning an initial public offering (IPO).

The organization has confidentially submitted a draft registration on Form F-1 — a filing that is required for the registration of certain securities by foreign issuers — to the United States Securities and Exchange Commission (SEC) relating to a proposed IPO, Arm Ltd. said in a Saturday (April 29) press release.

“The size and price range for the proposed offering have yet to be determined,” Arm said in the release. “The initial public offering is subject to market and other conditions and the completion of the SEC’s review process.”

SoftBank Founder Masayoshi Son has made Arm’s IPO a strategic focus, has said he wants it to be the biggest ever IPO in the semiconductor industry, and has talked with investment banks that have pitched valuations ranging from $30 billion to $70 billion, Bloomberg reported Monday (May 1).

SoftBank expects Arm to remain a consolidated subsidiary after the IPO, according to the report.

The announcement of Arm’s filing with the SEC comes more than a year after the company and Nvidia announced that they were ending an attempted merger due to “significant regulatory challenges.”

The attempted deal started in September 2020 when Nvidia agreed to buy Arm from SoftBank in what could have been the chip industry’s biggest acquisition.

However, antitrust concerns raised by United States, United Kingdom and European regulators led to the collapse of the deal in February 2022 before any of the regulators adopted a final decision.

With the deal over, SoftBank made clear its intentions to take Arm public.

The announcement also comes about six weeks after it was reported that SoftBank Group’s privately held valuations for its Vision Fund 2 were 40% lower through the second half of 2022.

As PYMNTS reported March 17, for the tech companies and for the venture capital (VC) firms that have been the beneficiaries of funds like that of SoftBank Group, the squeeze is on because as investors pull back and valuations keep getting marked down, these companies will be less readily able to attract those investments.