Lineage Announces Closing of Initial Public Offering

Rhea-AI Summary

Lineage (Nasdaq: LINE) has successfully closed its initial public offering (IPO), raising approximately $4.2 billion in net proceeds. The company offered 56,882,051 shares of common stock at a public offering price of $78.00 per share. Trading on the Nasdaq Global Select Market began on July 25, 2024, under the ticker symbol 'LINE'.

The company plans to use the proceeds to repay outstanding borrowings, fund employee cash grants, pay tax withholding obligations, and redeem Series A preferred stock. Any remaining funds will be used for general corporate purposes. The IPO was managed by a consortium of leading investment banks, including Morgan Stanley, Goldman Sachs, BofA Securities, J.P. Morgan, and Wells Fargo Securities as joint lead book-running managers.

Positive

• Successful IPO raising approximately $4.2 billion in net proceeds
• Listing on Nasdaq Global Select Market, potentially increasing visibility and liquidity
• Plans to use proceeds for debt repayment, potentially improving the company's financial position
• Strong support from major investment banks as underwriters

Negative

• Potential dilution of existing shareholders due to the large number of new shares issued
• Significant portion of proceeds allocated to debt repayment rather than growth initiatives
• Expenses related to employee cash grants and tax withholding obligations may impact financial results

Financial Analyst

Lineage's successful IPO marks a significant milestone for the company, raising an impressive $4.2 billion in net proceeds. This substantial capital injection positions Lineage favorably in the market and provides ample resources for strategic initiatives.

The company's prudent allocation of funds, primarily towards debt repayment, demonstrates a commitment to strengthening its balance sheet. By paying down the delayed draw term loan and revolving credit facility, Lineage is likely to improve its debt-to-equity ratio and reduce interest expenses, potentially boosting profitability in the long term.

The decision to fund one-time cash grants to employees is a strategic move that could enhance employee retention and motivation. However, investors should monitor the impact on operating expenses in the short term.

The redemption of Series A preferred stock is another positive step, simplifying the company's capital structure and potentially reducing dividend obligations.

With $78.00 per share as the IPO price, the market's initial valuation of Lineage appears robust. Investors should closely watch the stock's performance in the coming weeks to gauge market sentiment and potential volatility.

The involvement of numerous prestigious underwriters suggests strong institutional interest, which could provide stability to the stock price. However, the large number of underwriters also indicates significant fees, which have been factored into the net proceeds.

Overall, this IPO positions Lineage as a significant player in its industry, with a strong capital base to support future growth initiatives. Investors should monitor how effectively management deploys the remaining proceeds for 'general corporate purposes' to drive long-term value creation.

Market Research Analyst

Lineage's IPO is a noteworthy event in the current market landscape, particularly given its size and timing. The successful raising of $4.2 billion indicates strong investor appetite for new offerings, despite recent market volatility.

The IPO's pricing at $78.00 per share and the issuance of 56,882,051 shares suggest a market capitalization of approximately $4.44 billion. This places Lineage among the larger IPOs of recent years, reflecting confidence in the company's business model and growth prospects.

The diverse group of underwriters, including major players like Morgan Stanley and Goldman Sachs, as well as smaller, specialized firms, indicates broad market interest and could help ensure a wide distribution of shares among various investor types. This diversity may contribute to liquidity and stability in the stock's trading.

Investors should note the potential market impact of Lineage's debut. As a newly listed company with a substantial market cap, it may be considered for inclusion in various indices, which could drive additional demand for the stock.

The timing of the IPO, amidst a period of economic uncertainty, suggests that Lineage and its underwriters see a window of opportunity in the current market. This could indicate a potential shift in market sentiment towards growth-oriented investments.

Looking ahead, the performance of Lineage's stock in the secondary market will be crucial. A strong performance could encourage other companies considering IPOs to move forward, potentially leading to increased activity in the new issues market.

Overall, this IPO serves as a significant benchmark for market appetite and could influence the timing and pricing of future offerings in the sector.

NOVI, Mich.--(BUSINESS WIRE)-- Lineage, Inc. (the “Company”) (Nasdaq: LINE) today announced the closing of its underwritten initial public offering of 56,882,051 shares of its common stock at a public offering price of $78.00 per share. The net proceeds from the offering were approximately $4.2 billion, after deducting underwriting discounts and commissions and estimated expenses payable by the Company. The Company intends to use the net proceeds received from the offering to repay borrowings outstanding under its delayed draw term loan, repay borrowings outstanding under its revolving credit facility, fund one-time cash grants to certain of its employees in connection with this offering and estimated cash to pay tax withholding obligations associated with stock grants and redeem its Series A preferred stock. Following such uses, the Company expects to use the remaining net proceeds for general corporate purposes, which may include the repayment of additional borrowings outstanding under its revolving credit facility.

The Company’s common stock began trading on the Nasdaq Global Select Market on July 25, 2024, under the ticker symbol "LINE".

Morgan Stanley, Goldman Sachs & Co. LLC, BofA Securities, J.P. Morgan and Wells Fargo Securities acted as joint lead book-running managers for the offering. RBC Capital Markets, LLC, Rabo Securities USA, Inc., Scotia Capital (USA) Inc., UBS Securities LLC, Capital One Securities, Inc., Truist Securities, Inc., Evercore ISI, Robert W. Baird & Co. Incorporated, KeyBanc Capital Markets Inc., Mizuho Securities USA LLC, PNC Capital Markets LLC, Deutsche Bank Securities Inc., CBRE Capital Advisors, Inc., HSBC Securities (USA) Inc., Piper Sandler & Co. and Regions Securities LLC acted as joint book-running managers for the offering. Blaylock Van, LLC, Cabrera Capital Markets LLC, C.L. King & Associates, Inc., Drexel Hamilton, LLC, Guzman & Company, Loop Capital Markets LLC, Roberts & Ryan Investments, Inc. and R. Seelaus & Co., LLC acted as co-managers.

A registration statement relating to these securities was declared effective by the U.S. Securities and Exchange Commission on July 24, 2024. The offering was made only by means of a prospectus. Copies of the final prospectus related to this offering may be obtained from Morgan Stanley, Prospectus Department, 180 Varick Street, New York, New York 10014, or email: prospectus@morganstanley.com; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316, or email: prospectus-ny@ny.email.gs.com; BofA Securities, NC1-022-02-25, 201 North Tryon Street, Charlotte, North Carolina 28255-0001, Attention: Prospectus Department, email: dg.prospectus_requests@bofa.com; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com; and Wells Fargo Securities, 90 South 7th Street, 5th Floor, Minneapolis, MN 55402, at 800-645-3751 (option #5) or email a request to WFScustomerservice@wellsfargo.com.

About Lineage

Lineage, Inc. (Nasdaq: LINE) is the world’s largest global temperature-controlled warehouse REIT with a network of over 480 strategically located facilities totaling over 84.1 million square feet and 3.0 billion cubic feet of capacity across countries in North America, Europe, and Asia-Pacific. Coupling end-to-end supply chain solutions and technology, Lineage partners with some of the world’s largest food and beverage producers, retailers, and distributors to help increase distribution efficiency, advance sustainability, minimize supply chain waste, and, most importantly, feed the world.

Forward-Looking Statements

Certain statements contained in this press release may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Lineage intends for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such forward-looking statements can generally be identified by Lineage’s use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “seek,” “objective,” “goal,” “strategy,” “plan,” “focus,” “priority,” “should,” “could,” “potential,” “possible,” “look forward,” “optimistic,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Such statements are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of Lineage’s performance in future periods. Except as required by law, Lineage does not undertake any obligation to update or revise any forward-looking statements contained in this release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240726329471/en/

Investor Relations Contact

Evan Barbosa

VP, Investor Relations

ir@onelineage.com

Media Contact

Megan Hendricksen

VP, Global Marketing & Communications

pr@onelineage.com

Source: Lineage, Inc.

FAQ

How much did Lineage (LINE) raise in its IPO?

Lineage (LINE) raised approximately $4.2 billion in net proceeds from its initial public offering.

What was the IPO price for Lineage (LINE) shares?

The public offering price for Lineage (LINE) shares was $78.00 per share.

When did Lineage (LINE) start trading on the Nasdaq?

Lineage (LINE) began trading on the Nasdaq Global Select Market on July 25, 2024.

How does Lineage (LINE) plan to use the IPO proceeds?

Lineage (LINE) plans to use the proceeds to repay borrowings, fund employee cash grants, pay tax withholding obligations, redeem Series A preferred stock, and for general corporate purposes.