Lineage achieves largest IPO of 2024 so far with $4.4 billion raise

Temperature-controlled storage and logistics giant Lineage Inc. has successfully raised approximately $4.4 billion through an expanded initial public offering (IPO), marking the largest first-time share sale of the year.

The Novi, Michigan-based company sold nearly 57 million shares at $78 each, near the top of its initial price range of $70 to $82, the company said in a statement.

This IPO brings Lineage’s market value to about $19 billion, making it the most significant IPO since ARM Holdings’ $4.87 billion offering in September 2023​.

The substantial valuation also underscores Lineage’s dominant position in the temperature-controlled logistics industry.

The company’s common stock is expected to begin trading on the Nasdaq Global Select Market from Thursday under the ticker symbol “LINE.”

IPO’s success shows strong investor demand

The IPO’s success reflects strong investor demand, leading Lineage to increase its share offering from the originally planned 47 million shares.

Norway’s $1.7 trillion sovereign wealth fund expressed interest in purchasing up to $900 million worth of Lineage shares, highlighting the broad investor confidence in the company’s market position and future prospects​.

With the IPO Lineage will join fellow US cold storage operator Americold on the Nasdaq, both companies structured as Real Estate Investment Trusts. However, Lineage’s market capitalisation far exceed Americold’s, which has a market cap of $7.7 billion.

Listing to lift IPO market’s spirits

Lineage’s successful IPO is a positive signal for the broader IPO market, which has seen a recovery in 2024.

US IPO volume this year has reached over $22 billion, data compiled by Bloomberg, shows. That’s nearly two-thirds higher than the corresponding period last year, but below the average IPO volume seen in the decade before the pandemic, the data show.

The success of Lineage and other companies, such as KKR & Co.-backed OneStream Inc., which raised $490 million in its IPO thus indicates improving market sentiment and could encourage more companies to go public in the near future​.

Besides, Lineage’s market debut is expected to influence related stocks in the logistics and storage sector, potentially driving up valuations based on comparative performance and investor sentiment.

What does Lineage do?

Lineage, founded in 2008 by private equity executives Adam Forste and Kevin Marchetti, operates 482 temperature-controlled warehouses across 19 countries.

The company serves over 13,000 customers in the food supply chain, including distributors, retailers, and manufacturers.

Despite its expansive growth, Lineage reported a net loss of $96.2 million on revenue of $5.3 billion in 2023, an increase from a net loss of $76 million on revenue of $4.9 billion the previous year​.

The company plans to use the funds raised to repay outstanding borrowings as well as fund one-time cash grants to certain employees.

Trading and future outlook

The positive reception and strong demand for its shares indicate robust market confidence.

Lineage has raised over $9 billion in equity from institutional investors, including BentallGreenOak, Stonepeak, Dan Sundheim’s D1 Capital, and Oxford Properties. This strong financial backing provides the company with the resources needed to continue its growth and innovation.

The interest from Norwegian wealth fund Norges Bank Investment Management, which intends to purchase up to $900 million worth of shares, further demonstrates investor confidence in Lineage’s future prospects.

Analysts will closely watch Lineage’s trading performance to gauge the broader market’s reaction to large-scale IPOs amidst current economic conditions.

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