Filing Flows › Arm Holdings (ARM) › Takeover & LBO
Is Arm Holdings (ARM) a takeover target?
A leveraged buyout at today's price plus 30% ($225.22 a share) would return a loss of about 0% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%. At $238.9B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect. Historically 2.3% of companies with its figures were bought within a year (0.45× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $225.22 | today's $173.25 plus 30% |
| × shares | 1,078.0 million | |
| = Equity value | $242.8B | |
| + Debt refinanced | $0 | |
| − Cash | $3.9B | |
| = Enterprise value | $238.9B | 209.4× EBITDA of $1.1B |
| Fees | $4.8B | 2% of the price |
| New debt | $6.3B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $237.4B | 97% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $5.6B | $1.2B | $480M | −$5.4M | $6.3B |
| Year 2 | $5.9B | $1.3B | $480M | $27.1M | $6.3B |
| Year 3 | $6.3B | $1.4B | $478M | $59.1M | $6.2B |
| Year 4 | $6.5B | $1.4B | $474M | $89.6M | $6.1B |
| Year 5 | $6.7B | $1.5B | $467M | $118M | $6.0B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 160.3× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $238.8B | |
| − Debt left | $6.0B | |
| = Buyer's equity | $232.9B | |
| Money multiple | 0.98× | on $237.4B put in |
| Buyer's yearly return (IRR) | −0.4% |
Price against return
What the buyer makes at other premiums over today's $173.25.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $190.58 | 3.2% |
| 20% | $207.90 | 1.3% |
| 30% | $225.22 | −0.4% |
| 40% | $242.55 | −1.9% |
| 50% | $259.88 | −3.3% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $5.2B | |
| EBITDA, last 12 months | $1.1B | 22.1% of revenue |
| Depreciation and amortization | $264M | |
| Capital spending | $588M | |
| Debt | $0 | |
| Cash | $3.9B | |
| Share price | $173.25 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 17% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Arm Holdings would cost about $225.22 a share, $242.8B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 12% | $194.04 | $209.2B |
| Median | 30% | $225.22 | $242.8B |
| High end (a quarter paid more) | 31% | $226.96 | $244.7B |
The odds, from history
Historically 2.3% of companies with its figures were bought within a year (0.45× the average). Its figures put it in decile 1 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Arm Holdings' latest quarter
Arm Holdings, Q2 FY27: revenue $1.4B (+27% year over year), operating margin 13.9%, net earnings $130M, operating cash flow $207M. The chart follows the revenue to costs, profit and cash.
Questions
Is Arm Holdings being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Arm Holdings?
A leveraged buyout at today's price plus 30% ($225.22 a share) would return a loss of about 0% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%. At $238.9B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
What would a takeover of Arm Holdings cost?
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Arm Holdings would cost about $225.22 a share, $242.8B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.