SoftBank Backed Arm Eyes $52B IPO with T. Rowe Price as Key Player

Arm Holdings Ltd, a chip designer backed by SoftBank Group Corp SFTBF SFTBY, has officially launched its roadshow for its highly anticipated initial public offering (IPO). 

The company aims to convince investors that it's worth as much as $52 billion in what could be the most significant share sale of the year.

Also Read: Databricks in Talks with T. Rowe Price for $43B Valuation, Eyes Expansion

The roadshow commenced in Baltimore, the headquarters of influential asset manager T. Rowe Price Inc TROW, emphasizing the significance of the fund manager's role in significant IPOs. 

T Rowe Price has been an anchor investor in notable IPOs, including electric car maker Rivian Automotive Inc RIVN in 2021, valued at $66.5 billion.

SoftBank offers 95.5 million American depository shares of Arm for $47 - $51 each, potentially raising to $4.87 billion at the top of the range. 

Arm's proposed valuation range is between $48 billion - $52 billion, possibly reaching $54.5 billion on a fully diluted basis.

The valuation represents a decrease from the $64 billion at which SoftBank acquired the 25% stake it didn't already own in Arm last month. 

The market will closely watch the IPO for how Arm manages its relationship with its China business amid the ongoing technology tensions between China, and the U.S. SoftBank will retain 90.6% of Arm's ordinary shares after the IPO, with no proceeds going to the conglomerate.

Arm has secured significant clients like Apple Inc AAPL, Nvidia Corp NVDA, and Alphabet Inc GOOG GOOGL as cornerstone investors in its IPO.

Analysts suggest that Arm could benefit from the growing demand for artificial intelligence, riding on the coattails of Nvidia, which has surged in the AI sector. Arm's specialty in energy-efficient central processing units (CPUs) aligns with the AI boom, potentially driving its growth.

Arm expects to trade on the Nasdaq under the symbol "ARM" as it returns to the public markets.

Price Action: TROW shares traded higher by 0.97% at $112.90 premarket on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.