By Jack Denton and Lina Saigol
Canadian chip developer Alphawave IP said on Thursday that it is considering plans for an initial public offering on the London Stock Exchange, in an unusual example of a North American company crossing the Atlantic to float.
Alphawave said that it plans to set up research and development headquarters in Cambridge, providing a welcome boost to the U.K. government, which has been on a drive to attract more technology listings to compete with key financial centers including the U.S.
The Toronto-based company said it had managed to secure cornerstone agreements with funds and accounts managed by BlackRock and Janus Henderson to subscribe for $510 million of offer shares, which will give the company an equity valuation of around $4.5 billion.
The IPO will include issuing new shares, raising approximately $500 million, as well as an offer of existing stock to be sold by current shareholders.
Founded in 2017, Alphawave is a semiconductor developer with a focus on efficient, high-speed and high-volume data connectivity, building chips for computer systems, phone networks and data centers that use relatively low power. The company said that its technology has applications across 5G wireless infrastructure, artificial intelligence and autonomous vehicles.
Alphawave said it has been profitable since its first full year of operation in 2018 and that from 2019 to 2020 revenues increased by more than 200% year-over-year.
The company has expanded aggressively in the U.K. through a partnership announced in March with Oxford-based Ensilica, a leading designer of custom application-specific integrated circuit, or ASIC, chips. Alphawave also counts semiconductor giants TSMC /zigman2/quotes/204359850/composite TSM +3.22% and Samsung /zigman2/quotes/209800866/delayed KR:005930 +0.74% among its partners, as well as European industrial group Siemens /zigman2/quotes/205905025/delayed XE:SIE +2.55% , which builds high-tech factories.
The IPO will be closely watched by investors, after shares in U.K. food delivery company Deliveroo /zigman2/quotes/225812915/delayed UK:ROO +2.82% fell by almost a third on their first day of trading on the LSE in March.
Since then, Cybersecurity giant Darktrace has also announced plans to float in London, with some reports suggesting its IPO could value the Cambridge-based company at about $3 billion.
The U.K. is already home to some of the world’s leading semiconductor designers, such as Cambridge-based Arm, which was bought by U.S. chip designer Nvidia /zigman2/quotes/200467500/composite NVDA +5.29% last year. The $40 billion takeover is now facing a probe by the U.K. government over national security concerns.
“We have chosen to come to the U.K. because of its incredible technology and semiconductor industry ecosystem,” said Alphaware Chief Executive Tony Pialis.
“The strong research base in the U.K. — and our new R&D headquarters in Cambridge — offers an excellent foundation for the next stage of our global growth. There is a deep pool of knowledge, experience, and talent,” he added.
The IPO is being coordinated by Barclays /zigman2/quotes/208409333/delayed UK:BARC +2.74% and JPMorgan /zigman2/quotes/205971034/composite JPM +3.31% , with Bank of Montreal /zigman2/quotes/206428109/composite BMO +1.97% as a joint bookrunner if the offer proceeds.