Private-Equity Group Reaches Deal to Buy Medline for Over $30 Billion -- 3rd Update
June 05 2021 - 4:53PM
Dow Jones News
By Cara Lombardo and Miriam Gottfried
A group of private-equity firms reached a deal to acquire
Medline Industries Inc. that would value the medical-supply company
at more than $30 billion, in one of the largest leveraged buyouts
since the financial crisis.
Medline said Saturday that Blackstone Group Inc., Carlyle Group
Inc. and Hellman & Friedman LLC had reached a deal to take a
majority stake in the company.
The Wall Street Journal reported earlier Saturday that the group
was close to a deal after beating out a rival bid from the
private-equity arm of the Canadian investing firm Brookfield Asset
Management Inc.
Including debt, the transaction would be valued at about $34
billion, and north of $30 billion excluding borrowings, people
familiar with the matter 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 more than 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.
The 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 would remain the single largest shareholder in the
company after the buyout, and the management team would remain in
place, the company said Saturday.
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 2008-09 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.
BDT & Co. also acted as financial adviser to Medline, and
Wachtell, Lipton, Rosen & Katz was legal adviser. BofA
Securities Inc., J.P. Morgan, Barclays, Morgan Stanley and
Centerview Partners advised Blackstone, Carlyle and Hellman &
Friedman, and Simpson Thacher & Bartlett LLP was the group's
legal adviser.
Write to Cara Lombardo at cara.lombardo@wsj.com and Miriam
Gottfried at Miriam.Gottfried@wsj.com
(END) Dow Jones Newswires
June 05, 2021 16:48 ET (20:48 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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