Topline
A group of private-equity firms led by Blackstone Group has agreed to purchase Medline Industries, the companies announced Saturday, in a deal that the Wall Street Journal reports values the medical supply firm at more than $30 billion, promising a huge payday for the Mills family, who told Forbes in February 2020 that they owned 100% of the company.
Key Facts
Funds managed by Blackstone, Carlyle and Hellman & Friedman will take a majority stake in Medline, which is the largest privately held manufacturer and distributor of medical supplies in the U.S., generating sales of $17.5 billion in 2020.
The companies did not disclose the value of the deal, but sources told the WSJ it’s worth about $34 billion, and excluding debt, values Medline at more than $30 billion.
After the buyout, the Mills family will remain the single largest stockholder in the company and the existing management team will remain in charge: CEO Charlie Mills, President Andy Mills and COO Jim Abrams, who’s a member of the family by marriage.
The companies said the deal, which is expected to close late this year, will give Medline the funding to expand its product lineup, speed up its expansion overseas and strengthen its global supply chain.
Key Background
With roots going back to 1910, Medline was founded in 1966 by brothers James and Jon Mills, who took it public in 1972, then took it private again five years later. Charlie Mills, James’ son, has served as Medline’s CEO since 1997. At the onset of the pandemic last year, Medline ramped up production of such items as bleach products, face masks, surgical gowns, disinfecting wipes and toilet paper. Andy Mills, told Forbes at the time, “the volume [of calls seeking supplies] is off the charts... I literally can't go an hour without getting some kind of request in my mailbox.”
Tangent
The buyout of Medline, which could be the largest LBO yet in the healthcare industry, could lead to a resurgence in “club deals,” whereby several private-equity firms join forces to acquire a company, Bloomberg reported last month. These transactions lost some favor after the financial crisis as investors in multiple PE funds weren’t comfortable having too much cash exposed to the same assets. The biggest leveraged buyout in history, the $45 billion takeover of utility TXU Corp. was a club deal. It ended up in bankruptcy in 2013.
What To Watch For
In late May, Christina Minnis, Goldman Sachs global head of acquisition finance, said she expected to see some large LBOs this year. Already Goldman has underwritten five deals of at least $10 billion each, putting it on pace to break its record of eight such deals for a year.
Further Reading
LBO Madness (Forbes)
The Harsh Realities Of Corporate America's Decade-Long Leveraged Buyout (Forbes)
The Homemade LBO (Forbes)
