Raine Group shows up as the financial adviser on the front cover of Arm Holdings Ltd.’s filing for its initial public offering, one line above the 28 banks that will be underwriting the listing.
(Bloomberg) — Raine Group shows up as the financial adviser on the front cover of Arm Holdings Ltd.’s filing for its initial public offering, one line above the 28 banks that will be underwriting the listing.
Raine and Arm share one all-important connection; both are backed by SoftBank Group Corp.
Financial advisers on IPOs like Raine don’t serve as underwriters and don’t buy or sell stock. They are sometimes brought in to assist companies in helping organize a big listing involving lots of banks.
Arm disclosed in its filing Monday with the US Securities and Exchange Commission that in exchange for Raine’s advisory services for the IPO, the bank could receive compensation similar to how underwriters are paid.
Raine racked up $2.5 million for its services for the year ended March 31, according to the filing. Arm said the work already done by Raine entitles it to 5% of the underwriting discounts and commissions in what is expected to be the year’s biggest IPO—and the bank could earn an additional 5% of those discounts and commissions.
SoftBank and Raine have a lot of ties. Raine’s co-founder, Jeff Sine, has been a board member at Arm since 2022, according to Arm’s filing. SoftBank is also an investor in some of Raine’s funds, the prospectus shows.
Sine has known SoftBank Chief Executive Officer Masayoshi Son since the 1990s and has worked on major deals involving its portfolio companies such as Sprint Corp.’s merger with T-Mobile US Inc., WeWork’s restructuring and Flipkart’s sale of a majority stake to Walmart Inc.
Raine was also one of Arm’s advisers in its deal to be acquired by Nvidia Corp. That transaction fell apart after regulatory and customer pushback.
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