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In his note Scemama examines the costs of a number of different approaches to the privatization of ARM.
For example, the cash-generative nature of ARM's IP licensing business would makes the company attractive for a leverage buyout (LBO) by a private equity company or consortium. Such a group could borrow the $3 billion or so needed to buy ARM and then load the company with the debt, which its cash generation should, in theory, be able to service.
But such an outcome might not appeal to the licensees of ARM technology.
"With [ARM having] a 1.9 billion euro market capitalization [about $2.8 billion] this would require these ten companies to contribute 190 million euro [about $280 million] or less each. Although a large sum, we believe that many large OEMs, foundries and chipmakers would rather pay that amount than see ARM in the wrong hands," Scemama wrote.
Some things stand in the way of such an acquisition; one being the long-term semiconductor industry trend towards disaggregation. This disaggregation is one reason for ARM's existence as a chipless chip company. The second is that the Symbian foundation model as a means of keeping Intel and Microsoft out of the mobile phone industry has largely run out of steam. The appetite for such protective measures would seem less today than it did in the 1990s, when Symbian rose to prominence.
"I am not talking about re-aggregation, but about protecting a strategic asset," Scemama told EE Times. "Either you take the company private or a consortium could take a 30 or 40 percent stake as a blocking move."
As to the Symbian precedent, Scemama argued that the smartphone operating system was never a large enough part of the overall mobile phone landscape to capture the interest of all the mobile phone handset makers. The primary interest in Symbian had always come from Nokia. In contrast ARM is of strategic interest to scores of companies, Scemama said.
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