Lineage Logistics raises $1.6bn to drive growth

Cool-storage warehousing and solutions specialist to use funds to pursue new acquisitions and organic expansions around the world.

Temperature-controlled warehousing giant Lineage Logistics has raised US$1.6 billion in equity from new and existing strategic partners to pursue new acquisitions and organic expansions around the world.

The US group, which claims to be the world’s largest temperature-controlled industrial real estate investment trust (REIT) and logistics solutions provider, said the investment was validation of the group’s business model, strategy and “plans to continue expanding our footprint as the world’s largest temperature-controlled warehousing and logistics company”. Participating investors included Oxford Properties Group, BentallGreenOak, D1 Capital Partners, Cohen & Steers, OPTrust, CenterSquare Investment Management, and investment funds managed by Morgan Stanley Tactical Value.

During 2020, Lineage has announced 16 acquisitions and executed on 15 new expansions and greenfield facilities. The company also continues to develop a number of the world’s most advanced fully automated warehouses “that will reduce environmental intensity, while providing flexible and expansive capacity for customers during a period where the global pandemic is putting acute strain on the global food supply chain”.

It noted: “New capital will fuel these increasingly large investments.”

Last month, Lineage Logistics announced the completion of ten strategic acquisitions in the United States to build on its facility network. And over the past eighteen months, Lineage completed strategic domestic acquisitions consisting of 24 locations across core population and food production markets. It said all of these acquisitions have either been successfully integrated or are on track to be integrated by year end.

It said Lineage’s recent acquisition activity in the United States was in response to growing demand for cold storage, which is supported by strong population growth, changing consumer food preferences and increasing demand for the services of third-party logistics providers as the food supply chain becomes increasingly complex.

UK expansion

And earlier this month, the company announced significant expansion plans in the United Kingdom at its ‘Peterborough Superhub’ in the South East of England and at its ‘Northern Superhub’ in Heywood near Manchester.

Lineage broke ground on the 92,000-pallet-position, fully automated expansion at its Peterborough location to form a strategically positioned South Eastern Superhub, which will serve both retail and foodservice customers with unique supply chain requirements. This new capacity will complement 26,000 existing conventional pallet positions at the property, which combined with the expansion’s automated design will enable maximum flexibility and as highly customized solutions for customers.

This significant investment brings Lineage’s total automated warehouse count in the UK to six, with a total of 330,000 automated pallet positions.

Lineage Logistics is the largest temperature-controlled supply chain and logistics provider in the UK, and will offer over 525,000 pallet positions of capacity in country following construction. The company supports over 2,000 regional, national and international customers across 14 facilities nationwide, including Scotland, and complements its warehouses with one of the UK’s largest and most reliable transportation networks. Over 1,500 of Lineage’s 16,000 global employees are based in the UK.

Lineage stressed that its cold storage campuses in the UK complement the company’s international network of facilities and provides an opportunity to reduce unnecessary miles travelled by food through its location and capacity.

These expansions follow Lineage’s recent entrance into the Nordic and Canadian markets and increase overall capacity to 1.9 billion cubic feet and 56 million square feet of capacity across more than 320 facilities in 13 countries, spanning North America, South America, Europe, Asia, Australia and New Zealand.

The company also last month announcement the completion of the company’s acquisition of Ontario Refrigerated Services, which marks Lineage’s entrance into Canada and the launch of its greater North American platform.

Greg Lehmkuhl, President and CEO of Lineage, commented. “As we reimagine the food supply chain and execute on our company purpose to eliminate waste and help feed the world, we remain focused on driving value for our more than 5,000 customers by operating globally and deploying industry-changing technologies to create efficiencies across our 320 facilities.”

Adam Forste, Co-Executive Chairman of Lineage and Co-Founder and Managing Partner at Bay Grove, which founded and manages Lineage Logistics, commented: “Since the company’s founding in 2008, we have been on a mission to transform the food chain by building a global platform, fueling it with advanced technologies and putting in place a world-class leadership team to lead this industry. From the acquisition of our first warehouse, we have been able to build Lineage by having great investors – this capital raise adds an incredible group of new strategic partners and board participants that will further accelerate our ability to grow and innovate.”

Fonte: Lloyd’s