The $4.44 billion initial public offering (IPO) of Lineage Logistics values the company at more than $18 billion, making it the largest IPO since chip designer Arm’s $4.87 billion offering last September. Lineage’s shares are set to begin trading on Nasdaq on Thursday.
Investors view Lineage as an indicator for the broader IPO market. Some companies, enticed by the stock market’s near-record highs, have seen their shares underperform post-IPO due to investor concerns over high valuations. This has discouraged many potential IPO candidates from proceeding.
Globally, IPOs totaled $48.8 billion in the first half of 2024, an 18% decrease from the previous year and the lowest for this period since 2016, according to LSEG data. However, U.S. IPOs raised $17 billion, more than doubling the amount from the previous year and reaching a three-year high.
Reflecting improved IPO market sentiment, shares of OneStream, a financial software company backed by private equity firm KKR, closed their first trading session at $26.85, after being priced at $20 in their IPO.
Lineage Logistics specializes in temperature-controlled warehouses, operating 482 facilities worldwide and serving over 13,000 customers, primarily in the food supply chain, including distributors, retailers, and manufacturers. The business was started as a single warehouse in Seattle in 2008 by private equity executives Adam Forste and Kevin Marchetti. They have since expanded it through 116 acquisitions, generating $5.3 billion in revenue in 2023. Forste and Marchetti’s firm, Bay Grove Capital, holds the majority ownership of Lineage.
Structured as a real estate investment trust (REIT), Lineage allows shareholders to deduct some of the taxes on their dividends. The company has been using its cash flow for acquisitions and investments, resulting in a net loss of $162.8 million for the 12 months ending in March.
