Cold Storage REIT Raises $4.4B In Largest IPO Of 2024
A company built on keeping things cold debuted Thursday as the hottest new ticket on the stock market.
The initial public offering of Lineage, a cold storage logistics firm based in Novi, Michigan, seized the title of 2024's biggest stock market debut. It raised $4.4B by selling nearly 57 million shares at $78 apiece, Bloomberg reported.
The REIT, backed by Bay Grove Capital, was initially earmarked to market 47 million shares for between $70 and $82 per unit, Bloomberg reported. Bay Grove continues to have a majority of the voting power.
Lineage began trading Thursday under the Nasdaq ticker symbol LINE. As of Thursday afternoon, its stock price was up about 4%, hovering around $81 per share.
The company, which was founded in 2012 by two former Morgan Stanley investment bankers, operates more than 480 warehouses encompassing 84M SF in mainly densely populated distribution markets, including 312 in North America and 82 in Europe, according to its IPO filing.
Since its founding, Lineage has grown into the world’s largest cold storage warehouse owner, ahead of Atlanta-based Americold Realty Trust, in an industry that is largely fractured in its ownership.
“We strongly believe the public market is the best way to deliver growth at scale by providing us with the advantages of a liquid currency and direct access to a lower cost of capital,” founders and co-Executive Chairmen Adam Forste and Kevin Marchetti wrote in Lineage’s IPO prospectus filed with the Securities and Exchange Commission. “Moreover, we believe that if we can remain true to what has made us successful as a private company, we will be even more successful as a publicly traded one.”
Lineage CEO Greg Lehmkuhl will continue to lead the public company.
Lineage has grown mainly through real estate and company acquisitions, including buying Quebec cold storage operator Entrepôt du Nord Inc. earlier this year. It bought VersaCold, MTC Logistics, Turvo and Mandai Link Logistics in 2022, and it added numerous cold storage companies in 2021, including Kenyon Zero Storage, Bolingbrook Cold Storage, Hanson Cold Storage and Midwest Refrigerated Services, according to its prospectus.
Despite generating $5.3B in revenues for the fiscal year ending March 31, Lineage reported a net loss of $162.8M.
Lineage said in its prospectus that going public will give it the liquidity to not only grow in the cold storage market but also leverage its technology to reduce food waste. The cold storage industry is expected to grow from $43B in 2023 to $118.8B by 2031, according to data cited by trade publication The Packer.
“Our purpose is to transform the global food supply chain to eliminate waste and help feed the world,” Lineage said in its prospectus. “It is estimated that approximately one-third of the food produced globally is lost or wasted and 12% is lost due to a lack of refrigeration.”
KKR Capital Markets is Lineage's lead financial adviser, with BDT & MSD Partners, Seven Lakes Partners and Eastdil Secured acting as independent financial advisers for the IPO. Lineage also used more than 20 joint bookrunners for its stock offering, including CBRE, Morgan Stanley, Goldman Sachs, Wells Fargo Securities, Mizuho and Truist Securities.
Lineage reported that Norges Bank Investment Management, the world's largest sovereign wealth fund, indicated an interest in buying up to $900M in shares of its common stock.
