Exclusive-Arm signs up big tech firms for IPO at $50 billion-$55 billion valuation-sources

NEW YORK (Reuters) – Customers of Arm Holdings Ltd including Apple Inc, Nvidia Corp, Alphabet Inc and Advanced Micro Devices Inc are set to invest in the chip designer’s initial public offering, according to people familiar with the matter.

Intel Corp, Samsung Electronics Co Ltd, Cadence Design Systems Inc and Synopsys Inc are also being lined up as investors for the offering, the sources added. The talks are ongoing and some other potential investors are also currently in discussions to invest in the IPO, the sources added.

SoftBank Group Corp, which owns Arm, is targeting a valuation between $50 billion to $55 valuation, Reuters reported earlier on Friday. Arm’s clients have agreed to invest in that valuation range, the sources said.

While it is possible that demand for Arm’s shares will lead to a higher valuation by the time the IPO prices, the move represents a climb-down from the $64 billion valuation at which SoftBank acquired the 25% stake in the company it did not already own from its $100 billion Vision Fund last month.

Apple, Nvidia and the other strategic investors have agreed to invest between $25 million to $100 million each in the blockbuster IPO, the sources said. Arm and SoftBank have set aside 10% of the shares to be sold in the IPO for its clients, Reuters has previously reported.

Amazon.com Inc, which had previously held talks to invest in the IPO, has decided not to participate, one of the sources said, requesting anonymity as the discussions are confidential.

Arm and SoftBank did not immediately respond to requests for comment.

Alphabet, AMD, Amazon, Apple, Intel, Nvidia, Samsung, Cadence and Synopsys did not immediately respond to requests for comment. The Wall Street Journal reported on Arm’s valuation target earlier on Friday.

(Reporting by Echo Wang in New York; Editing by Anirban Sen)