Semiconductor Firm Allegro MicroSystems Raises $350M In IPO

Allegro MicroSystems, Inc (NASDAQ: ALGM) priced 25 million shares at $14 a piece in its initial public offering on Thursday.

What Happened: The semiconductor firm is poised to get proceeds of $350 million in the IPO.

Barclays plc (NYSE: BCS), Credit Suisse Group AG (NYSE: CS), and Wells Fargo & Company's (NYSE: WFC) Securities arm are serving as the joint lead book-running managers for the issue.  

Jefferies Financial Group Inc (NYSE: JEF), Mizuho Financial Group, Inc’s (NYSE: MFG) Securities unit, Needham & Company, and Sumitomo Mitsui Financial Group, Inc (NYSE: SMFG) subsidiary SMBC Nikko are also acting as book-running managers.

The underwriters have a 30-day option to purchase an additional 3.7 million shares of common stock from certain shareholders. Allegro will not receive proceeds from any such sale.

Shares are expected to begin trading on the Nasdaq Stock Market under the symbol “ALGM” on Thursday.

Why It Matters: The integrated circuit manufacturer's net sales, as of the fiscal year ended March 2019, totaled $724.3 million and net income was $84.8 million. 

In fiscal 2020, sales totaled $650.1 million and net income was $37.1 million, as per the company’s S-1 filing with the United States Securities and Exchange Commission.

The semiconductors space is heating up with Nvidia Corporation (NASDAQ: NVDA) set to acquire British chipmaker Arm from SoftBank Group Corp (OTC: SFTBY) in a $40 billion deal.

This week, Advanced Micro Devices, Inc (NASDAQ: AMD) announced it would acquire programmable chipmaker Xilinx, Inc (NASDAQ: XLNX) in an all-stock transaction valued at $35 billion.

Photo courtesy: Raimond Spekking via Wikimedia