UL Solutions Announces Pricing of Secondary Public Offering of Class A Common Stock

Rhea-AI Summary

UL Solutions Inc. (NYSE:ULS) has announced the pricing of a secondary public offering of 20,000,000 shares of its Class A common stock at $49.00 per share. The offering consists entirely of secondary shares to be sold by UL Standards & Engagement, with underwriters having a 30-day option to purchase up to an additional 3,000,000 shares. UL Solutions is not offering any shares and will not receive any proceeds from the sale. The offering is expected to close on September 9, 2024. Goldman Sachs & Co. and J.P. Morgan are acting as lead managing bookrunners, with several other firms participating in various roles. The offering is being made only by means of a prospectus, with copies available from the lead bookrunners.

Positive

• Secondary offering priced at $49.00 per share, indicating market confidence
• Potential for additional 3,000,000 shares to be sold, suggesting strong demand
• Participation of multiple reputable financial institutions as underwriters and bookrunners

Negative

• Dilution of existing shareholders' ownership due to 20,000,000 new shares being offered
• UL Solutions will not receive any proceeds from the offering
• Potential downward pressure on stock price due to increased supply of shares

Insights

Financial Analyst

The pricing of UL Solutions' secondary public offering at $49.00 per share for 20 million shares is a significant development. This offering, valued at approximately $980 million, represents a substantial liquidity event for the selling stockholder, UL Standards & Engagement. The additional 3 million share option could potentially increase the offering to $1.127 billion.

The involvement of major underwriters like Goldman Sachs and J.P. Morgan suggests strong institutional interest. However, it's important to note that UL Solutions won't receive any proceeds from this offering, which means no direct capital influx for the company. This could be viewed as a neutral event for UL Solutions' financial position, although it might increase the stock's liquidity and broaden the shareholder base.

Investors should monitor how this increased float affects stock price and trading volume in the short term. Long-term implications will depend on how UL Standards & Engagement uses the proceeds and whether this impacts its relationship with UL Solutions.

Market Research Analyst

This secondary offering marks a significant shift in UL Solutions' ownership structure. With 20 million shares hitting the market, we're looking at a potential dilution of existing shareholders' stakes. The $49.00 per share price point is important - it reflects current market valuation and sets a benchmark for future trading.

The timing of this offering, amidst volatile market conditions, is noteworthy. It suggests confidence in UL Solutions' market position and growth prospects. However, the fact that it's a secondary offering by a major stakeholder rather than a primary offering for company growth could raise questions about long-term insider confidence.

The diverse underwriter lineup, including both bulge bracket and boutique firms, indicates a strategic approach to distribution. This could help ensure a stable post-offering trading environment. Investors should watch for any lock-up agreements and potential future offerings, as these could impact stock price dynamics in the coming months.

NORTHBROOK, Ill.--(BUSINESS WIRE)-- UL Solutions Inc. (NYSE:ULS) (“UL Solutions”) today announced the pricing of its underwritten public offering (the “offering”) of 20,000,000 shares of its Class A common stock at a public offering price of $49.00 per share. The offering consists entirely of secondary shares to be sold by UL Standards & Engagement (the “selling stockholder”). The underwriters have a 30-day option to purchase up to an additional 3,000,000 shares of Class A common stock from the selling stockholder at the public offering price, less underwriting discounts and commissions. UL Solutions is not offering any shares of its Class A common stock in the proposed offering and will not receive any proceeds from the proposed sale of the shares. The offering is expected to close on September 9, 2024, subject to customary closing conditions.

Goldman Sachs & Co. LLC and J.P. Morgan (in alphabetical order) are acting as lead managing bookrunners with BofA Securities acting as a managing bookrunner. Citigroup, UBS Investment Bank and Jefferies are acting as additional bookrunners for the proposed offering. Baird, Houlihan Lokey, PNC Capital Markets LLC, Raymond James, Stifel, Wells Fargo Securities, William Blair, AmeriVet Securities, Bancroft Capital, Cabrera Capital Markets LLC, Loop Capital Markets and R. Seelaus & Co., LLC are acting as co-managers for the proposed offering.

The offering is being made only by means of a prospectus. When available, copies of the final prospectus relating to the offering may be obtained from: Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, via telephone: (866) 471-2526, via fax: 212-902-9316, or via email: prospectus-ny@ny.email.gs.com and J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com.

A registration statement on Form S-1 relating to the offering of these securities was declared effective by the U.S. Securities and Exchange Commission on September 5, 2024. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About UL Solutions

A global leader in applied safety science, UL Solutions (NYSE: ULS) transforms safety, security and sustainability challenges into opportunities for customers in more than 110 countries. UL Solutions delivers testing, inspection and certification services, together with software products and advisory offerings, that support our customers’ product innovation and business growth. The UL Mark serves as a recognized symbol of trust in our customers’ products and reflects an unwavering commitment to advancing our safety mission. We help our customers innovate, launch new products and services, navigate global markets and complex supply chains, and grow sustainably and responsibly into the future. Our science is your advantage.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release, which are not historical facts, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding the closing of the offering. These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties and other factors that may cause our actual results or performance to differ materially from those expressed or implied by the forward-looking statements made in this press release, including the risks discussed in UL Solutions’ filings with the SEC, including the registration statement on Form S-1 related to the proposed offering, each of which is accessible on the SEC’s website at www.sec.gov. Such forward-looking statements are made only as of the date of this press release. UL Solutions does not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting such forward-looking statements, except to the extent required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240905530972/en/

Kathy Fieweger

Senior Vice President - Communications

Kathy.Fieweger@ul.com

312-852-5156 

Source: UL Solutions Inc.

FAQ

How many shares of UL Solutions (ULS) are being offered in the secondary public offering?

UL Solutions is offering 20,000,000 shares of its Class A common stock in the secondary public offering, with an option for underwriters to purchase an additional 3,000,000 shares.

What is the price per share for UL Solutions' (ULS) secondary public offering?

The public offering price for UL Solutions' secondary offering is $49.00 per share of Class A common stock.

When is the expected closing date for UL Solutions' (ULS) secondary public offering?

The secondary public offering for UL Solutions is expected to close on September 9, 2024, subject to customary closing conditions.

Who are the lead managing bookrunners for UL Solutions' (ULS) secondary public offering?

Goldman Sachs & Co. and J.P. Morgan are acting as the lead managing bookrunners for UL Solutions' secondary public offering.