The IPOX® Update 9/5/23

Investment Banks Anticipate $100 Million from Arm's IPO

Japanese conglomerate SoftBank-owned British chip designer Arm is set to stage its IPO with an intended fundraising target between $5 billion to $5.4 billion. This pegs the potential valuation of the company at $50 billion to $54 billion. A grand consortium of 28 banks is poised to manage this IPO, with leading entities such as British multinational bank Barclays, U.S. investment bank Goldman Sachs, U.S. banking heavyweight JPMorgan, and Japanese financial services firm Mizuho in line to secure a commendable 17.5% of the fees, raising $100m from the listing. Key tech powerhouses like Apple, Nvidia, Intel, and South Korean electronics giant Samsung have thrown their weight behind this endeavor as strategic investors. The IPO share pricing is eagerly awaited on September 13, with the trading debut set for the subsequent day. (Source)

Opinion: London dodged a bullet with Arm's US Listing

Interesting opinion piece on British semiconductor entity Arm. The chipmaker is unveiling its IPO to the market amidst a backdrop of scaled-down valuation expectations. The company's IPO journey is significant due to its prior valuation of $64 billion by SoftBank, with the current range now standing at $50-$54 billion. A noteworthy point is the collapsed private sale to U.S. tech giant Nvidia Corp. at $40 billion, curtailed by regulatory constraints. Furthermore, the chipmaker has chosen the Nasdaq for its listing, sidestepping a probable FTSE 100 inclusion had it selected London. With several premier banks steering the IPO, Arm's performance after listing will be closely observed, while investors remain advised to proceed with prudence. (Source)

Renault's EV Arm Ampere Aims for €10b Valuation in Upcoming IPO

French car manufacturing titan Renault is gearing up its electric vehicle (EV) segment, Ampere, for an IPO in the first half of the upcoming year, targeting a formidable valuation of €10 billion. Steering the initiative is CEO Luca de Meo who emphasizes that EV production holds a unique space distinct from conventional vehicles. With unmatched confidence, de Meo articulates that the impending public listing of the EV unit is a bold move where he has “nothing to lose”. (Source)

Novartis to Enlist Generic Drug Unit Sandoz on Swiss Exchange

Swiss pharmaceutical behemoth Novartis is advancing its generic drug segment, Sandoz, onto the Swiss stock exchange with the listing penned for October 4, 2023. Current shareholders of Novartis stand to receive one share of Sandoz for every five of their Novartis holdings. Significantly, in the first half of 2023, Sandoz marked impressive net sales of $4.8 billion, predominantly influenced by the European market. The unit's Core EBITDA achieved a noteworthy milestone by reaching $1.0 billion, attributed to dynamic sales growth and an enhanced product mixture. For the medium term, Sandoz has set its sights on net sales growth in the mid-single digits and targets achieving an EBITDA margin in the bracket of 24-26% by 2028. (Source)

JBS Aims for NYSE Listing Amid ESG Concerns

The world's largest meatpacker, Brazilian-based JBS, has revealed plans to list on the New York Stock Exchange (NYSE). The company's move has, however, raised several environmental and governance concerns. Advocacy groups are pressuring the SEC to reconsider the listing, citing JBS's significant emissions and connections to deforestation. Despite being a meatpacker, JBS does not publicly factor in livestock in its major carbon emissions assessments. The company's environmental record is further tainted by its links to illegal deforestation and alleged child labor. Additionally, the company's issuance of "green" bonds that exclude over 90% of their emissions has raised eyebrows. Governance issues also loom large as post-listing, the Batista family might control up to 90.5% of the voting power. (Source)

ZF Friedrichshafen Contemplates IPO for Passive Safety Division

German automotive supplier ZF Friedrichshafen is deliberating on the potential sale or initial public offering (IPO) of its passive safety division. This sector of the company, which includes vital products like airbags and seat belts, accounted for 10% of the group's €43.8 billion ($47.2 million) sales in the prior year. A decision regarding the division's future is anticipated in 2024. Leading investment banks are actively scouting for potential investors for the division. CEO Holger Klein, in a recent appearance at the IAA Mobility show, disclosed the first measures towards a carve-out. The primary goal of the potential sale is to decrease the firm's debt, providing a higher financial cushion for research & development investments. Klein expressed the company's emphasis on their technology portfolio, stating they have "more ideas than money." (Source)

Truth Social's Public Offering Navigates Troubled Waters

The public offering of the Truth Social platform, an initiative by former U.S. President Donald Trump, is sailing through uncertain financial and regulatory terrains. The media venture has been derailed by various challenges, including the firing of its former CEO and the arrest of a board member over insider trading allegations. The enterprise's fate is now hinged on an impending shareholder vote concerning the acquisition by the special purpose acquisition company (SPAC), Digital World. Adding to the complexities, the SEC has proposed an $18 million fine for Digital World over alleged misrepresentations during its initial public offering. The growth trajectory of Truth Social appears to be tapering, with competition emerging both from established platforms and newer right-leaning platforms like Gab and Rumble. (Source)