Kioxia prpare son IPO

With its upcoming IPO in Tokyo on October 6, Kioxia Holdings expects to raise $3.6 billion, representing an overall valuation of approximately $20.1 billion. A Greek-Japanese pun (kioku/memory and axia/value), Kioxia has since 2019 brought together the activities and patents on Toshiba Memory Corporation’s NAND Flash components. It was the Bain Capital investment fund that won ahead of Apple, SK Hynix and Western Digital by forming a consortium of American, Japanese and South Korean investors to take control of this strategic entity with 56.2% shares while Toshiba is content with 40.2%. Kioxia’s major shareholders – Toshiba and Bain Capital – will sell some of their stakes in this IPO, with the company also issuing new ones. With this IPO, Toshiba’s stake will drop to 32% and Bain’s to 47.8%.

The former Toshiba subsidiary specializing in the manufacture of NAND flash components had attracted the interest of Apple, Bain Capital, SK Hynix and Western Digital before ending up in the hands of Toshiba and a consortium led by Bain Capital. (Credit Kioxia)

If Samsung holds 31% of the NAND Flash market, Kioxia comes just behind with 17%. This IPO is motivated by Kioxia’s desire to raise funds to support the development of 5G (more flash memory expected on 5G mobiles) and that of Bain Capital to recover part of its investment in a particularly volatile market. Analysts expect strong demand for the IPO, which will offer around 35% of the free float to Japanese investors and foreign financial institutions. The Japanese government considers Kioxia to be a strategic asset and is following the case very closely. The Tokyo Stock Exchange has yet to give the green light to Kioxia’s listing. And on October 6, Kioxia plans to go public in Tokyo to raise nearly $3.6 billion.

The NAND flash market is still dominated by the South Korean Samsung in the second quarter of 2020. (Source DRAMeXange/Wells Fargo Securities)