NEW YORK – On Wednesday, Lineage (NASDAQ: LINE), the world’s largest operator of cold-storage warehouses, announced it raised $4.44 billion in its US initial public offering, setting it up for the biggest stock market debut globally this year.
The Novi, Michigan-headquartered company priced just under 57 million shares in New York at $78 apiece, the upper end of its previously indicated range of $70 to $82.
Earlier in the day, Reuters exclusively reported the IPO pricing, citing sources, and said that Lineage had initially planned to sell 47 million shares and sold more because of strong demand.
The $4.44 billion IPO values Lineage at over $18 billion and is the biggest since chip designer Arm’s $4.87 billion offering last September. Its shares will begin trading on the Nasdaq on Thursday.
Investors see Lineage (NASDAQ: LINE) as a bellwether for the wider IPO market. Some companies that were tempted to list by the stock market hovering near record highs have seen their shares subsequently trade poorly, as investors sour on the frothy valuations. This has put off many IPO hopefuls from following suit.
IPOs globally totaled $48.8 billion during the first half of 2024, a decrease of 18% compared to the year earlier and their lowest level for the period since 2016, according to LSEG data. Proceeds for US IPOs totaled $17 billion, however, more than double year-earlier levels and a three-year high.
In a sign of improved IPO market sentiment, shares of OneStream, a financial software maker backed by private equity firm KKR, ended their first session of trading on Wednesday at $26.85 after pricing at $20 in their IPO.
Lineage specializes in temperature-controlled warehouses, operating 482 of them worldwide and serving more than 13,000 customers, many of them involved in the food supply chain as distributors, retailers, and manufacturers.
Private equity executives Adam Forste and Kevin Marchetti launched the business as one warehouse in Seattle in 2008. They have since grown it through 116 acquisitions, generating $5.3 billion in revenue in 2023. Forste and Marchetti’s firm, Bay Grove Capital, owns most of Lineage.
Lineage (NASDAQ: LINE) is structured as a real estate investment trust, which allows shareholders to deduct some of the taxes they pay on their dividends. The company has been using its cash flow for acquisitions and investments in its business, posting a net loss of $162.8 million for the 12 months to the end of March.
(Source: Reuters)
Kevin Putnam is a financial journalist and editor based in New York. He specializes in editing news and analysis related to U.S. stock market.
