UL Solutions, the product testing, inspection and certification body, upsized its NYSE IPO by 20% and priced the offering towards the upper end of the range for proceeds of US$946.4m.
Late on Thursday, a 16-firm syndicate led by Goldman Sachs, JP Morgan and Bank of America sold 33.8m shares or nearly 17% of UL at US$28, towards the upper end of the US$26–$29 marketing range, bankers involved in the offering told IFR.
The offering was many multiple times covered, enabling the syndicate to sell about 20% more shares than the 28m envisaged at launch.
UL will begin trading on Friday under the ticker "ULS".
Management hopes that by going public it will be able to accelerate growth via M&A and better exploit its exposure to trends such as energy transition, electrification, the internet of things, sustainability and regulatory compliance.
Nonprofit parent UL Standards & Engagement sold all the shares in the offering to cut its stake to about 83%. The parent will retain almost total control as the owner of all super-voting shares, though this dual-class structure (often frowned upon by investors) will fall away at the earlier of seven years or when the stake falls below 35%.
Norges support
Norges Bank Investment Management, which manages Norway's US$1.61trn sovereign wealth fund and has a heavy ESG bias, agreed upfront to buy US$75m of shares in the IPO. UL Standards is locked up for 180 days but Norges is not.
In 2023, UL Solutions reported net income of US$276m and adjusted Ebitda of US$563m from revenue of US$2.7bn, the latter up 6.3%.
UL Solutions' origins date back to the late 1800s when founder William Henry Merrill Jr was sent to the World's Fair in Chicago to assess fire risks for his job at Boston Board of Fire Underwriters. He later formed the Underwriters’ Electrical Bureau before Underwriters Laboratories was incorporated as a non-profit in 1901.
More recently, the UL organization has split into a for-profit entity providing testing and certification (UL Solutions) and two non-profits, UL Research Institutes that focuses on safety research and UL Standards & Engagement, which develops safety standards.
As a public company, UL Solutions expects to make acquisitions but may also use its excess cashflow to repurchase stock, CFO Ryan Robinson said.