S-11/A: Lineage, Inc. Files Amendment for Proposed IPO, Aiming to Transform Global Food Supply Chain

• Lineage, Inc., a temperature-controlled warehouse REIT, has filed an amendment to its S-11 registration statement for a proposed IPO.
• The company is offering 47,000,000 shares of common stock, with an expected initial price between $70.00 and $82.00 per share.
• The IPO aims to provide Lineage with a liquid currency and access to lower-cost capital to further fuel its growth.
• Norges Bank Investment Management has indicated an interest in purchasing up to $900 million in shares.
• Lineage operates a global network of 482 warehouses, comprising over 84.1 million square feet, and serves more than 13,000 customers.
• The company generated $5.3 billion in revenue and $1.3 billion in Adjusted EBITDA for the twelve months ended March 31, 2024.
• Lineage intends to use the net proceeds to repay debt and for general corporate purposes.
• The company has elected and believes it has qualified to be taxed as a REIT for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2020.
• The company's charter prohibits beneficial ownership by any person of more than 9.8% of the company's capital stock to assist in qualifying as a REIT.
• Affiliates of Bay Grove Capital Group will continue to own a majority of the voting power after the offering, making Lineage a controlled company.

Score: 7

Explanation: The document presents a mix of positive and negative factors. The company's strong market position, growth strategy, and commitment to sustainability are positive. However, the company faces risks related to debt, competition, and economic conditions. The sentiment is cautiously optimistic.

• The IPO will provide Lineage with access to capital for growth and expansion.
• The company has a large and diversified customer base.
• Lineage is a leader in the growing temperature-controlled warehousing market.
• The company has invested heavily in technology to improve efficiency and customer service.
• The company has a strong and flexible balance sheet and has demonstrated access to debt and equity capital to support growth.
• The company is committed to sustainability and reducing food waste.

• The company is a controlled company, which may limit stockholder influence.
• The company has significant indebtedness outstanding.
• The company is subject to risks associated with expansion and development.
• The company is exposed to risks associated with expansion and development.
• The company is dependent on Bay Grove to provide certain services to us pursuant to the transition services agreement, and it may be difficult to replace the services provided under such agreement.
• The company may be vulnerable to security breaches or cyber-attacks which could disrupt our operations and have a material adverse effect on our financial condition and operating results.

• The company's investments are concentrated in the temperature-controlled warehouse industry.
• The company's warehouses are concentrated in certain geographic areas.
• Global market and economic conditions may materially and adversely affect the company.
• Labor shortages, increased turnover and work stoppages may disrupt the company's operations.
• The company is exposed to risks associated with expansion and development.
• The company is dependent on Bay Grove to provide certain services to us pursuant to the transition services agreement, and it may be difficult to replace the services provided under such agreement.
• The company may be vulnerable to security breaches or cyber-attacks which could disrupt our operations and have a material adverse effect on our financial condition and operating results.
• The company is subject to additional risks with respect to our current and potential international operations and properties.
• The company's Co-Founders will have substantial influence over our business, and our Co-Founders interests, and the interests of certain members of our management, will differ from our interests and those of our other stockholders in certain respects.
• The company's charter and bylaws contain provisions that may delay, defer or prevent an acquisition of our common stock or a change in control.
• There can be no assurance that the company will be able to make or maintain cash distributions, and certain agreements relating to our indebtedness may, under certain circumstances, limit or eliminate our ability to make distributions to our common stockholders.
• Failure to qualify as a REIT would cause the company to be taxed as a regular C corporation.

The company aims to maximize stockholder value by expanding solutions for customers, creating opportunities for team members, and driving innovation across the business and supply chain.

• The IPO is the opposite of an exit; it is a new beginning.
• 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 to further fuel our growth flywheel.
• We believe we are still in the very early innings of a long, successful journey.

The temperature-controlled warehousing market is large, growing, and resilient, driven by the durability of food consumption, global population growth, and shifting consumer preferences towards perishable foods. The market remains fragmented, with large, well-capitalized operators like Lineage best positioned to meet growing demand.

• Lineage is the largest temperature-controlled warehousing company globally, approximately twice the size of its next largest competitor.
• Lineage is as large as its next nine global competitors combined.
• Approximately 97% of Lineage's global warehousing segment revenues are from countries in which its local network of temperature-controlled warehouses is the largest.
• Lineage has a weighted average customer relationship of over 30 years across its current top 25 customers.
• Lineage has invested more than $725 million since the start of 2019 in transformational technology initiatives.
• Lineage has the largest automated portfolio in the industry with 81 fullyand semi-automated facilities.

• Shareholders: Potential for increased value through growth and innovation, but also risk of dilution and market volatility.
• Employees: Opportunities for growth and development, but also potential for job displacement due to automation.
• Customers: Access to a more efficient and sustainable food supply chain.
• Suppliers: Potential for increased business through Lineage's expanded network.
• Creditors: Repayment of debt with IPO proceeds strengthens the company's financial position.

• The company will continue to execute its growth strategy, including organic growth, accretive capital deployment, and strategic acquisitions.
• The company will focus on maximizing same warehouse NOI growth through occupancy and commercial optimization initiatives.
• The company will continue to implement productivity tools and cost containment measures.
• The company will strategically deploy innovative technologies to enhance profitability.
• The company will transform the industry through its data science-driven approach to warehouse control and design.

• Bay Grove will receive a one-time increase in its profit share attributable to the existing profits interest it holds in Lineage Holdings equal to $200.0 million.
• Affiliates of Bay Grove will receive $75.0 million in cash from Lineage Holdings repurchase of 986,842 OPEUs from Bay Grove pursuant to the formation transactions.
• We will have entered into a transition services agreement with Bay Grove, pursuant to which Bay Grove will provide us with certain transition services supporting capital deployment and mergers and acquisitions activity for three years following the closing of this offering to help us build our full internal capability during that period, and we will pay Bay Grove an annual fee equal to $8.0 million.
• We will have entered into a registration rights agreement with BGLH, pursuant to which we will grant it and certain of its affiliates with certain demand registration rights and customary piggyback registration rights.
• We, our operating partnership and Lineage Holdings will have entered into an agreement providing successive special repurchase rights and cash and equity top-up rights to certain legacy investors that benefits BGLH by ensuring that all Guarantee Rights will ultimately be satisfied by Lineage Holdings so that all investors in BGLH, Lineage, our operating partnership and Lineage Holdings are proportionately impacted by the Guarantee Rights based on their direct and indirect ownership interests in Lineage Holdings.
• Lineage Holdings will have entered into an expense reimbursement and indemnification agreement with BGLH, the LHR and Bay Grove pursuant to which Lineage Holdings will agree to (i) advance to or reimburse such entities for all of their expenses in any way related to our company, including expenses incurred in connection with the coordinated settlement process that will occur for up to three years for all legacy investors in both BGLH and our operating partnership and (ii) indemnify such entities to the fullest extent permitted by applicable law against liabilities that may arise in any way related to our company, including liabilities incurred in connection with or as a result of the coordinated settlement process.

• December 31, 2020: Commencement of REIT election for U.S. federal income tax purposes.
• March 1, 2025: 45-day window begins for Legacy Class A-4 OP Unit holders to exercise special redemption rights.
• July 22, 2024: Date of S-11/A filing.