By Anirban Sen
(Reuters) -Chipmaker GlobalFoundries, owned by Abu Dhabi’s sovereign wealth fund Mubadala Investment Co, is aiming for a valuation of about $25 billion in its initial public offering in the United States.
The IPO, one of the most hotly anticipated listings, is expected to cap a record year for flotations, after several big names such as Robinhood Markets Inc, Coinbase Global Inc and Roblox Corp capitalized on the stock markets boom earlier in 2021.
Alongside electric-vehicle maker Rivian’s stock market debut, GlobalFoundries is expected to headline an unusually crowded year-end IPO schedule.
IPOs in the United States have already touched an all-time record of over $250 billion this year, according to data from Dealogic.
In a filing to stock exchanges on Tuesday, GlobalFoundries set a price range between $42 and $47 a share for its stock market flotation. At the upper end of the range, the company is expected to raise about $2.6 billion.
Reuters was first to report in August that GlobalFoundries had filed for an IPO in New York that could value the company at around $25 billion.
Including the “greenshoe option”, which allows companies to sell additional shares during an IPO, GlobalFoundries could be valued at about $26 billion.
Funds associated with BlackRock Inc, Fidelity Management & Research Company LLC, certain affiliates of Koch Strategic Platforms LLC, Columbia Management Investment Advisers LLC and Qualcomm Inc have committed to invest about $1.05 billion in the IPO, as part of a so-called concurrent private placement.
Mubadala, which is selling 22 million shares in the IPO, will hold an 89.4% stake in GlobalFoundries and control 89.4% of the voting power, following the listing and the private placement, according to the latest filing.
SKYROCKETING CHIP DEMAND
In its latest filing, GlobalFoundries said it estimated third-quarter revenue to come in at around $1.7 billion, at the higher end of expectations, representing a 56% jump from a year earlier.
GlobalFoundries’ revenue had been in decline since 2018, but over the past 12 months the company’s growth rebounded as worldwide demand for chips skyrocketed.
The chipmaker has been consolidating its product lines and announced plans to expand in the United States and Singapore with new factories. It plans to build a second factory near its Malta, New York, headquarters, and spend $1 billion to boost output.
A shortage of semiconductor chips globally has forced the world’s biggest chipmakers to ramp up worldwide production in the aftermath of the COVID-19 pandemic that caused manufacturing delays.
In September, Intel Chief Executive Officer Pat Gelsinger said the U.S. company planned to invest up to $95 billion in Europe over the next decade.
GlobalFoundries was created when Mubadala bought Advanced Micro Devices Inc’s manufacturing facilities in 2009, and later merged it with Singapore’s Chartered Semiconductor Manufacturing Ltd.
The company, which makes radio-frequency communications chips for 5G, automotive, and other specialized semiconductors, counts Advanced Micro Devices and Broadcom Inc among its customers.
GlobalFoundries plans to list on the Nasdaq under the symbol “GFS”.
Morgan Stanley, BofA Securities, J.P. Morgan, Citigroup and Credit Suisse are the lead underwriters for the IPO.
(Reporting by Anirban Sen in Bengaluru; additional reporting by Niket Nishant; Editing by Shinjini Ganguli)
