A consortium of private equity groups, comprising Blackstone, Carlyle and Hellman & Friedman, has reached a deal to buy a majority stake in US medical supply group Medline for about $34bn, including debt, in what is the largest buyout of the year.
The transaction, announced by Medline on Saturday, is the largest buyout involving a club of private equity investors since the 2007 financial crisis. It ranks as one of the largest-ever private equity deals, behind the $44bn buyout of US energy group TXU Corporation in 2007.
Blackstone beat other consortiums of buyout groups, including one involving Bain Capital and CVC and another one led by Brookfield.
Illinois-based Medline, founded in 1966 by Jim and John Mills, is one of the largest manufacturers of medical supplies. The family-owned business is now run by Charles Mills.
Medline said that after the transaction it would continue to be led by the Mills family, which would remain its largest shareholder.
So-called club deals were popular in the years that preceded the financial crisis as they allowed private equity groups to be exposed to more and larger transactions. They came to an abrupt end after the crisis as credit dried up but have recently gained traction.
In 2018 Blackstone agreed its largest deal since the financial crisis by pulling together $17.3bn to take a controlling stake in the financial terminals and data business of Thomson Reuters. Canada Pension Plan Investment Board and Singapore state fund GIC helped finance the deal.
Medline is the largest privately held US manufacturer and distributor of healthcare supplies, with revenue last year of $17.5b, according to the company.
The Mills family company last year ramped up production of supplies including medical masks, biohazard bags, hand sanitiser and surgical gowns year to meet soaring demand during the pandemic.
“The volume is off the charts. I get emails and phone calls from acquaintances in the industry, from active customers, non-customers,” Andy Mills, Medline’s president, told Forbes last year.
“I literally can’t go an hour without getting some kind of request in my mailbox.”
Additional reporting by Anna Nicolaou in New York
Private equity group reaches deal to buy Medline for $34bn – Financial Times