Bain-backed memory chipmaker Kioxia launches $3.6 billion IPO

TOKYO (Reuters) - Kioxia Holdings, the world’s second-largest maker of flash memory chips, will list on the Tokyo Stock Exchange on Oct. 6 in an initial public offering worth up to $3.6 billion, a regulatory filing showed on Thursday.

The listing would be Japan's biggest IPO this year and allow a partial exit by U.S. private equity firm Bain Capital, which led a consortium that bought the former unit of Toshiba Corp 6502.T in 2018.

Kioxia, formerly known as Toshiba Memory, will offer up to 95.5 million shares in the IPO, including an overallotment in the event of exceptional demand, the filing with the Ministry of Finance showed.

At Kioxia’s indicative price of 3,960 yen per share, the company will offer up to 378 billion yen ($3.6 billion) in shares and have a market value of 2.13 trillion yen ($20.1 billion).

The Bain-led consortium, which includes South Korean chipmaker SK Hynix Inc 000660.KS, acquired Kioxia for 2 trillion yen in 2018, when Toshiba scrambled to plug a financial hole caused by the failure of its U.S. nuclear power unit.

Bain, which initially planned to list Kioxia last year, pushed back the listing because of deteriorating market conditions.

Flash memory prices have been unstable, but analysts see strong demand from cloud service providers and data centre players needing more data storage for artificial intelligence, autonomous driving and the Internet of Things.

Kioxia revealed in its filing it generated 22.8% of its revenue from Apple Inc AAPL.O in the April-June quarter. It also said sales to Huawei Technologies [HWT.UL] were "substantial" in the quarter, and that the latest U.S. restrictions on the Chinese firm may have a major earnings impact.

Toshiba, which reinvested to take a 40% stake in Kioxia, said in a statement it planned to sell down the stake to 32% and will return a majority of the net proceeds to shareholders. The Bain consortium’s stake will drop to 47.8% from 56.2% now.

Morgan Stanley MS.N, Goldman Sachs GS.N, JPMorgan JPM.N and Nomura 8604.T are among joint global coordinators for the IPO.

($1=106 yen)

Reporting by Makiko Yamazaki and Takashi Umekawa; Editing by Chris Gallagher/Clarence Fernandez/Jane Merriman