The English giant ARM will fall in the lap of the Japanese SoftBank. The Japanese group has just made a takeover offer valuing the specialist for mobile chips to $ 31 billion, the kind of proposal that can not be refused.
In recent weeks, SoftBank trying by all means to generate some cash. Nothing on June the Japanese giant has sold a 4.2% stake in Alibaba and all of its shares in Supercell, the editor of Clash of Clans . Total amount of these two operations: $ 16.5 billion, a bonanza that officially was used to mop up the huge debt of the company, estimated at more than $ 100 billion
An expensive acquisition.
Finally, SoftBank will use this abundant and sudden liquidity crunch reserve a chunk. It is indeed question of the purchase of the British ARM, specializing in chip design for mobile, for the sum of 24 billion pounds, or about $ 31 billion. Thunder for the sector since the ARM licenses are at the heart of almost all of the chips that equip smartphone and tablets , among others.
This amount is particularly high. It corresponds in fact to an increase of 43% compared to last known ARM, 69% from the average over the past three months and 41% vis-à-vis the highest recorded by the company history in March 2015.
to finance this acquisition, Softbank will have to issue new debt. This especially involves the subscription of a bridge loan in the amount of 1,000 billion yen or $ 9.5 billion. This must be repaid within two years, but the Japanese giant says it will later be refinanced by the long-term debt with a definitely more tolerable levels. The rest will come from the company’s cash reserves.
strong commitment on employment
To convince management to ARM, SoftBank has had the red carpet, including level of employment. SoftBank has thus committed to “ preserve the organization of ARM, including its management team, its brand, its business model based on partnerships and culture ” or holding the seat the company in Cambridge.
Another notable point Softbank has pledged to double the numbers of ARM in the UK within five years, while increasing staff abroad over the same period. Do not bother playing on offshoring to fulfill the contract. A contract of trust which would certainly give nightmares in one of the biggest French operators.
A redemption for what?
To justify this amount and commitments, SoftBank explains that “ ARM will be an excellent strategic reinforcement for the SoftBank group, as we invest to capture the opportunities offered by the Internet of Things .” It will be recalled for example that the Japanese company bought 95% of shares of the French Aldebaran Robotics in February 2015 before the rebrand SoftBank Robotics this year. Possible synergies in this context are fairly obvious.
putting his hand on ARM, SoftBank also chose to integrate a real cash machine in her lap. In 2015, the British achieved a turnover of 968 million pounds (about $ 1.28 billion) and a net profit of 511 million pounds or about $ 680 million.
ARM’s growth prospects are also looking good, by 2020 the company expects an annual growth of about 15% on the single chip business for smartphone . This with its ARMv7 architectures and ARMv8, but also thanks to its graphics chip Mali. The UK is also the market for network chips and servers, two markets that weigh more than $ 15 billion each on which ARM has only a marginal presence, for now.
Kevin Hottot
Journalist specialized in the video game universe. Passionate Dogecoin, crowdfunding. Never travels without her pony.
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