Blackstone, Carlyle, H&F to Buy Majority Stake in Medline

A consortium of private equity firms reached an agreement to buy medical supply company Medline Industries Inc. in what would be one of the biggest leveraged buyouts of all time.

The group, comprising Blackstone Group Inc., Carlyle Group Inc. and Hellman & Friedman, will take a majority stake in Medline. Singapore’s GIC Pte will also invest as part of the partnership, the consortium said in a statement Saturday.

The transaction is valued at more than $30 billion, according to people familiar with the matter. The deal is worth as much as $34 billion including debt and would include a $17 billion so-called equity check, one of the people said, asking not to be identified discussing confidential information.

Based in Northfield, Illinois, Medline is the biggest private U.S. manufacturer and distributor of medical supplies like medical gloves, gowns and exam tables to hospitals and doctor’s offices. The company is run by the billionaire Mills family: Chief Executive Officer Charlie Mills, his cousin Andy Mills, who is president, and Chief Operating Officer Jim Abrams, who is Charlie’s brother-in-law.

Charlie and Andy took the reins in 1997 from their respective fathers, Jim and Jon Mills. Those brothers founded the company in 1966, taking inspiration from their grandfather who helped sew gowns for surgeons at a hospital in Chicago before World War I.

The Mills family will remain the largest single shareholder, according to the statement, adding that there will be no changes to Medline’s senior management team.

The investment “will enable us to accelerate that strategy while preserving the family-led culture that is core to our success,” Medline’s CEO said.

Narrowed Down

The team beat out Canadian investment giant Brookfield Asset Management Inc. which was bidding on its own, the people said.

At least eight buyout firms had last month been preparing offers for the company, some lured by the prospect of getting the first shot at slashing costs and maximizing profits at a massive company in Medline that’s never been touched by another buyout firm.

Blackstone, Carlyle, and H&F were attracted to Medline because of the opportunity to work with the company to help it accelerate its international expansion, make new infrastructure investments, strengthen its supply chain and expand its product offerings.

By June 1, the bidding group had been narrowed down to three parties: the Blackstone consortium, Brookfield bidding on its own and a separate consortium that included Bain Capital, Advent International and CVC Capital Partners.

Bain’s consortium decided not to submit final bids after the final deadline was abruptly accelerated by several weeks, some of the people said.

Blackstone and H&F have teamed up to buy large assets in the past, including a bid to take Germany’s Scout24 private.

Medline generated $17.5 billion in sales in 2020, a representative said previously.

Goldman Sachs Group Inc. and BDT & Co. advised Medline on the transaction, one of the people said, while Bank of America Corp., JPMorgan Chase & Co., Barclays Plc, Morgan Stanley and Centerview Partners advised the private equity firms.

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