Private Equity Firms Buy Medline In $34 Billion Leveraged Buyout

NORTHFIELD, IL — A trio of private equity firms is set to purchase the medical supplier Medline Industries in one of the largest leveraged buyouts ever.

Blackstone Group, Carlyle Group and Hellman & Friedman partnered to take a majority stake of the Northfield-based company in a deal valued at about $34 billion, including nearly $4 billion in debt, the Wall Street Journal reported.

For the moment, the Mills family will remain in charge as the single largest shareholder in the privately held firm, company officials announced Saturday.

“Making healthcare run better has been our focus for decades," Charlie Mills, Medline's chief executive officer and the son of its co-founder, said in a release announcing the deal.

"This investment from some of the world’s most experienced and successful private investment firms will enable us to accelerate that strategy while preserving the family-led culture that is core to our success.”

The family will keep at least 20 percent of the company and is now worth about $30 billion, according to Bloomberg.

Medline has about 28,000 employees in more than 110 countries. Its revenue last year was $17.5 billion, according to company officials.

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The company has its roots in Chicago, where A.L. Mills founded a garment factory to make aprons for workers at the stockyards, according to a history of the firm.

Its business expanded into surgeons' gowns and nursing uniforms, and the company also began distributing medical supplies ahead of World War II.

Today, the firm is a major producer and distributor of supplies and equipment ranging from hospital beds, lab supplies, wheelchairs and personal protective equipment to bandages under the Curad brand. It is currently the 21st largest private company in the U.S., according to Forbes.

"The Mills family has built an exceptional business, and we are proud to partner with them and Medline’s management to support the company’s continued strong growth," said Joe Baratta, Blackstone's global head of private equity, in the announcement. "Large corporate partnerships with family-led companies are an area where we have deep experience and we look forward to investing in Medline’s further expansion."

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During a bidding process arranged by Goldman Sachs, senior executives from eight or more private equity firms interested in the deal "made pilgrimages" to Northfield to "woo members of the family," the Wall Street Journal reported.

The sovereign wealth fund GIC, formerly known as the Government of Singapore Investment Corp., is also investing as part of the private equity partnership.

The deal is expected to close before the end of the year, pending regulatory approvals and closing conditions.

Steve Wise, the global head of healthcare for the Carlyle Group, said he was excited to work with Medline's existing management to accelerate the company's growth.

"With a deep commitment to sustainable value creation," Wise said, "we look forward to leveraging our combined operational capabilities, expansive healthcare network and capital to support organic and inorganic growth initiatives for the Company.”