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Lineage, the world's largest operator of cold-storage warehouses, raised $4.44 billion in its U.S. initial public offering, marking the biggest stock market debut globally this year. The Novi, Michigan-headquartered company priced nearly 57 million shares at $78 each, at the upper end of its previously indicated range of $70 to $82. Initially planning to sell 47 million shares, Lineage increased the offering due to strong demand, valuing the company at more than $18 billion. This IPO is the largest since chip designer Arm's $4.87 billion offering last September, and Lineage's shares will begin trading on Nasdaq on Thursday. Investors view Lineage as a bellwether for the broader IPO market. Some companies have seen their shares trade poorly after debuting at high valuations, deterring many IPO hopefuls.
- Globally, IPOs totaled $48.8 billion in the first half of 2024, an 18% decrease from the previous year and the lowest level since 2016. However, U.S. IPOs raised $17 billion, more than double the year-earlier levels and reaching a three-year high. Signifying improved market sentiment, financial software maker OneStream, backed by KKR, saw its shares end their first trading session at $26.85 after pricing at $20. Lineage specializes in temperature-controlled warehouses, operating 482 facilities worldwide and serving over 13,000 customers in the food supply chain, including distributors, retailers, and manufacturers. Founded by private equity executives Adam Forste and Kevin Marchetti as one warehouse in Seattle in 2008, Lineage has grown through 116 acquisitions, generating $5.3 billion in revenue in 2023. Structured as a real estate investment trust, Lineage allows shareholders to deduct some taxes on their dividends, using its cash flow for acquisitions and business investments. The company reported a net loss of $162.8 million for the 12 months ending in March.
Why it matters
This IPO underscores the renewed optimism in the U.S. IPO market.
