UL Solutions IPO: Everything you need to know about UL Solutions

What do we know about the UL Solutions IPO?

UL Solutions is expected to go public November of 2023 after publicly filing for an IPO in October. Based in Chicago, the safety testing and certification group is owned by the non-profit group UL Standards & Engagement.

UL Solutions has not determined the number of common A shares that will be available or the anticipated price range. We do know the shares will be available on the New York Stock Exchange under the ticker symbol “ULS.”

The firm aims to be one of the largest IPOs of the year, shooting for $1 billion raised and a post-IPO valuation between $5 and $10 billion, according to the Financial Times. JPMorgan Chase and Goldman Sachs have been named as lead underwriters.

The IPO market looked to have a revival this fall with several industry leaders debuting after years of few to no IPOs due to market-wide economic uncertainty. However, those companies—ARM, Klaviyo, Instacart, and Birkenstock—have all since fallen below their offering prices. The poor performance of these companies has given other firms cold feet, such as CVC Capital Partners, which delayed its IPO for a second time this year.

Notably, UL Solutions intends to move forward despite the faltering market, pointing to the firm’s confidence in its business. It's true that the growing need to protect aging infrastructure and increased government regulation across North America is increasing business opportunities for UL Solutions.

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What does UL Solutions do?

UL Solutions is a Chicago-based safety science company that provides product testing and regulatory certifications for companies in the US and Canada. It is the oldest independent testing laboratory in the US and tests over 20 billion products annually.

As one of the largest North American companies in the testing, inspection and certification sector, UL Solutions tests both physical products and software in addition to advising on manufacturing and development processes. Typical projects of UL Solutions range from testing the SIM cards of mobile phones to advising operations on wind farm construction projects.

UL Solutions is one of just 21 companies approved by the US federal agency Occupational Safety and Health Administration (OSHA) as a nationally recognised testing laboratory. While safety certifications are not legally required in most industries, they are sought after because retailers may be wary of selling unregulated products, and nationally-recognised certifications can justify higher market prices.

In 2019 UL Solutions split from the two non-profit business units that make up the entire UL LLC: UL Research and UL Standards & Engagement. The move was viewed by some analysts as the first step towards going public, with CEO Jennifer Scanlon brought on to guide the for-profit business’s new direction.

UL Solutions not only tests products but directly develops many of the standards required for certification through the non-profit arms of its parent company, meaning it and its competitors are all testing for UL Solution standards. UL’s non-profit segments have developed over 1500 different safety standards approved for use in North America mostly for recycling systems, renewable energies, sustainable electronics, food and water products.

How much is UL Solutions worth?

UL Solutions does not have a public valuation, but inside sources report the company is targeting a valuation as high as $10 billion post-listing. The company has also discussed more conservative targets between $5 and $7 billion, according to those same sources.

Is UL Solutions profitable?

UL Solutions is a private company and does not voluntarily publish its financial reports. However, S&P Global recently published research stating the company’s annual revenue is more than $2.5 billion and an estimated EBITDA of $500 million.

Who are UL Solutions’s competitors?

UL Solutions competitors include global leaders like SGS Group, Eurofins, Bureau Veritas, CSA Group and Intertek, many of which are publicly listed companies. It can be useful for investors to compare company performance against competing firms in the wider market. The market cap to annual revenue ratio of UL Solution’s competitors aligns with the company’s target post-IPO, roughly 2:1.

All of these competing firms are registered by OSHA as nationally recognised testing labs (NRTLs), either directly or through subsidiaries. Most of them are publicly listed on international exchanges, meaning UL Solutions will provide US-based investors an opportunity into the sector via the New York Stock Exchange.

Bureau Veritas is based in Paris and focuses on testing electronic devices concerned with interoperability, electrical safety and chemical testing.

The CSA Group is a private, Ontario-based testing, inspection and certification firm. Like UL, CSA develops standards mainly for electrical equipment and industrial machinery.

Eurofins subsidiary MET Laboratories Inc. provides testing and certifications for electrical products. Along with UL Solutions, MET Labs is one of the most prominent testing labs in the US. The company was acquired by Eurofins, a French testing and laboratory group, in January 2018.

Intertek is a multinational safety testing and certification group with over 1000 testing facilities. The business focuses on consumer goods and retail including batteries, accessories, apparel and chemicals as well as providing quality assurance to construction, healthcare, food and transportation sectors.

SGS North America is the American subsidiary of SGS Group—one of the largest certification and inspection companies in the world. Present in 130 countries, SGS Group is headquartered in Zurich.

A major difference between UL Solutions and these competitors is that UL develops North American safety standards it and its competitors test for. This gives UL Solutions a competitive advantage for prospective customers looking to receive US regulatory certification.

Who owns UL Solutions?

UL Solutions is owned by Underwriters Laboratories, UL LLC. The company was established in 1894 as Underwriters Laboratories. In 2022, UL LLC divided operations into three distinct entities, one of them being UL Solutions, its only for-profit segment. The other two business units are UL Research Institutes and UL Standards & Engagement—both non-profits.

UL Solutions executive team

• Jennifer Scanlon - CEO
• Linda Chapin – Executive VP & Chief HR Officer
• John Genovesi – Executive VP & President, Software and Advisory
• Lynn Hancock – Executive VP & Chief Transformation Officer
• Jackie McLaughlin – Executive VP & Chief Legal Officer
• Ryan Robinson – Executive VP & CFO
• Gitte Schjøtz – Executive VP & Chief Science and Operations Officer
• Alberto Uggetti – Executive VP & Chief Commercial Officer
• Weifang Zhou – Executive VP & President, TIC

UL Solutions board of directors

• James M Shannon, Chairman
• Frank J Coyne
• James P Dollive
• Marla C Gottschalk
• Friedrich Hecker
• Charles Hooper
• Kevin Kennedy
• Lisa M Lambert
• Jennifer Scanlon
• Sally Susman
• Michael Thaman