Orange County Partnership - News

In Mega-Deal, Private Equity Investors to Pump $30 Billion into Medline Industries

Medline Industries, Inc., which is investing approximately $120 million in its 1.3-million-square-foot distribution facility currently under construction in Montgomery, is poised to receive $30 billion in investment from a partnership of funds managed by major private equity firms Blackstone, Carlyle and Hellman & Friedman.


The deal, announced earlier this month, will fuel the expansion of the healthcare supplier’s product offerings and accelerate its international expansion. The firm added that it will also continue to make new infrastructure investments to strengthen its global supply chain. Medline posted 2020 revenues of $17.5 billion.


While Blackstone, Carlyle and Hellman & Friedman will make a majority investment in Medline, the Northfield, IL-based company will remain a privately held, family-led company. Medline will continue to be led by Chief Executive Officer Charlie Mills, President Andy Mills and Chief Operating Officer Jim Abrams, all of whom have held their positions since 1997. Additionally, the Mills family will remain the largest single shareholder in the company. Medline also reported that the entire senior management team will stay in place.


“Making healthcare run better has been our focus for decades. 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,” said Medline CEO Mills.


Joe Baratta, Global Head of Private Equity at Blackstone, said of the pending deal, “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. 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.”


Steve Wise, Carlyle’s Global Head of Healthcare, added, “We are excited to partner with Medline’s impressive management team to accelerate growth through continued execution, innovation, and investment. With a deep commitment to sustainable value creation, we look forward to leveraging our combined operational capabilities, expansive healthcare network and capital to support organic and inorganic growth initiatives for the company.”


Rounding out the investors, Allen Thorpe, partner at Hellman & Friedman said, “Medline is known for its unwavering commitment to its customers, providing high-quality medical products that are used to treat patients every day. We are excited to support that commitment and partner with Medline to continue bringing the broadest and deepest capabilities to the healthcare industry.”


GIC, Singapore’s sovereign wealth fund, is also investing as part of the partnership.


The investment is expected to be completed in late 2021. Goldman Sachs & Co. LLC acted as lead financial advisor, BDT & Company, LLC acted as financial advisor and Wachtell, Lipton, Rosen & Katz acted as legal advisor to Medline. BoA Securities, Inc., J.P. Morgan, Barclays, Morgan Stanley, and Centerview Partners are acting as financial advisors to Blackstone, Carlyle, and Hellman & Friedman. Simpson Thacher & Bartlett LLP acted as legal advisor to Blackstone, Carlyle, and Hellman & Friedman.


In May, Medline reported the results of a three-year national capital expenditure campaign to support the long-term needs of healthcare providers that included $1.5 billion in new distribution centers, manufacturing capabilities and IT upgrades.


Coined as “The Medline Healthcare Resilience Initiative” the program spanned dozens of Medline divisions over the course of 2018-2020, culminating in approximately 8,500 new jobs, eight new distribution centers, nearly 150 manufacturing expansion projects and a new global digital customer ordering platform.


“Our ability to be flexible for healthcare providers has been a direct result of our ongoing planning for the future. We know we can make healthcare run better by answering and anticipating the needs of customers,” said CEO Mills. “Our investment initiative lets us plan for the future so we can care for providers and our communities for many years to come.”


During that period the company opened eight newly constructed distribution centers that created more than 6,500 jobs in construction and nearly 2,000 jobs in distribution which includes operations and product delivery, referred to as “MedTrans.”


Over the next four years the company plans to add more than 10 million square feet in warehouse space. With seven of the medical-grade distribution centers strategically set to open this year in key markets, the company is on track to be a leading healthcare partner in the new construction landscape in the United States with all buildings designed to meet LEED standards.


The new location in Grayslake, IL is estimated to be the largest medical-grade distribution center in the world. Other distribution centers on track to be completed this year, in addition to its development in Montgomery, include: Hammond, LA; Mebane, NC; Richmond Hill, GA; Southaven, MS and St. Peters, MO.