Investors seeking exposure to the safety standards industry have a new initial public offering (IPO) to size up.
On Monday, November 13, UL Solutions Inc. filed an S-1 form with the Securities and Exchange Commission (SEC) to list on the New York Stock Exchange (NYSE) under the ticker “ULS.”
The firm has not disclosed terms for its IPO or set a date for the launch. However, the expected volume of the deal is estimated to be around $1 billion.
The firm acts as an independent tester, inspector, and certifier for a range of consumer products and enterprise solutions that span dozens of industries. It also provides relevant software and advisory solutions.
“We are a global safety science leader that provides independent testing, inspection and certification (“TIC”) services and related software and advisory (“S&A”) offerings to customers worldwide,” UL stated in its filing documents.
Its parent entity, UL Standards & Engagement – a nonprofit safety and standards advocacy group – will maintain control via Class B supervoting shares. It will offer all Class A common shares through the deal.
Goldman Sachs, J.P. Morgan, Bank of America, Citigroup, Jefferies, UBS Investment Bank are billed as joint underwriters for the deal.
The company boasted net income of $214 million for the first three business quarters of 2023, down from $227 million a year ago. Meanwhile, total revenue increased to $1.99 billion from $1.89 billion a year ago.
Last year, it served over 80,000 corporate customers, 60 percent being either Fortune 500 or Global 500 firms. UL is present in over 100 countries worldwide.
Legacy Firm
UL Solutions has a long corporate history, dating back to 1894. It began life as a part of its predecessor nonprofit, Underwriters Electrical Bureau. Its first standard was issued in 1903 on “Tin Clad Fire Doors.” Although it is now a global brand, it remained in the United States for much of the 20th century. The UL seal of approval was first used internationally in Canada in 1992.
Future Outlook
According to Fortune Business Insights research, the global market for Testing, Inspection and Certification is anticipated to grow from around $220 billion in 2022 to $330 billion by 2029. If realized, this would result in a compound annual growth rate (CAGR) of just over 6 percent.
One of the major TIC growth drivers is the burgeoning demand for greater environmental, social, and governance (ESG) standards among corporations. Deepening digitalization of services and products (such as the Internet of Things) requires greater testing and compliance with privacy standards. Increased regulatory complexity for consumer products, driven in part by accelerating deglobalization and divergence between jurisdictions, is also tipped to keep demand for TIC services strong.
Other major players in the space include SGS, Intertek, Bureau Veritas, Intertek, and TUV Nord.
Interested investors will want to keep an eye on this deal and stay informed on any updates regarding final pricing and the expected launch date.
This article was produced and syndicated by Wealth of Geeks.