Private-Equity Group Nears Deal to Buy Medline for Over $30 Billion--2nd Update
June 05 2021 - 2:01PM
Dow Jones News
By Cara Lombardo and Miriam Gottfried
A group of private-equity firms is nearing a deal to acquire
Medline Industries Inc. that would value the medical-supply giant
at more than $30 billion, in one of the largest leveraged buyouts
since the financial crisis.
The deal could come together as soon as this weekend assuming
the talks don't fall apart, according to people familiar with the
matter. The consortium -- Blackstone Group Inc., Carlyle Group Inc.
and Hellman & Friedman LLC -- beat out a rival bid from the
private-equity arm of Canadian investing giant Brookfield Asset
Management Inc., the people said.
Including debt, the transaction would be valued at about $34
billion, and north of $30 billion excluding borrowings, the people
said. That could potentially make it the largest healthcare LBO
ever.
Based in Northfield, Ill., family-owned Medline is a
little-known but major player in the field of medical equipment. It
manufactures and distributes equipment and supplies used in
hospitals, surgery centers, acute-care and other medical facilities
in over 125 countries.
Medline's vast array of products include surgical gowns,
examination gloves and diagnostic equipment, as well as
consumer-facing brands such as Curad bandages. It has some $17.5
billion in annual sales, according to the company's website.
Brothers James and Jon Mills founded the company in 1966, taking
it public in 1972. The brothers bought back the shares five years
later. James's son Charlie has been Medline's CEO since 1997.
The family will remain the single largest shareholder in the
company after the buyout and the management team will remain in
place, some of the people said.
The sale of Medline would be the latest sign that private-equity
firms have regained their taste for big buyouts. They all but
disappeared after a number of them performed poorly or filed for
bankruptcy in the wake of the financial crisis, weighed down by
mountains of debt. Firms are now sitting on more than $1.6 trillion
of unspent cash, according to data provider Preqin-- and that
doesn't take into account the billions that big institutional
investors are clamoring to invest directly in deals.
The fact that three private-equity firms came together -- they
are equal partners, some of the people said -- harks back to an
earlier era before the crisis, when so-called club deals were
common. They fell out of favor as firms have generally preferred to
partner with their biggest investors, but have started to appear
more lately, and this deal was too large to do without
partners.
In a sign of how hungry the firms were for the deal, senior
executives from the bidders made pilgrimages to Medline's suburban
Chicago headquarters to woo members of the family.
The Wall Street Journal reported in April that Medline was
exploring a sale, likely to private equity, and had hired Goldman
Sachs Group Inc. to run the process. The winning consortium beat
out a field of bidders that over the course of the auction included
a who's-who of the biggest buyout firms.
Write to Cara Lombardo at cara.lombardo@wsj.com and Miriam
Gottfried at Miriam.Gottfried@wsj.com
(END) Dow Jones Newswires
June 05, 2021 13:58 ET (17:58 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Carlyle (NASDAQ:CG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Carlyle (NASDAQ:CG)
Historical Stock Chart
From Jul 2023 to Jul 2024