Medline-Blackstone Buyout Leaves a Massive Mark on Corporate Deals

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Jun. 7 2021, Published 12:12 p.m. ET

A trio of private equity firms has agreed to purchase Medline in a multi-billion dollar deal. Blackstone Group (NYSE:BX) is leading the charge, joined by Carlyle Group (NASDAQ:CG) and Hellman & Friedman.

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How much is this acquisition worth? What does it mean for the future of Medline and the U.S. corporate atmosphere as a whole? 

Medline specializes in healthcare product production.

Medline's key area of interest is producing and supplying healthcare products. The company's key offerings are medical clothing, bandages, and specialized devices. Medline raked in $17.5 billion in revenue last year, which was its 90th year in business.

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How much the Medline Blackstone buyout is worth

Together, Blackstone, Carlyle, and Hellman & Friedman purchased Medline for $30 billion. The amount includes purchasing the company's debt.

Is Medline going public following the $30 billion acquisition?

Two of the firms that purchased Medline, Blackstone and Carlyle, are publicly traded. However, Medline will still be privately held after the deal. Even so, BX and CG stock are responding to the news about the massive acquisition. 

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Carlyle stock is up 3.02 percent from mid-afternoon on June 4, while Blackstone has seen a 1.9 percent increase. This isn't life-changing for existing shareholders, but it emphasizes the enthusiasm behind the Medline deal.

The Mills family will retain its majority stake in Medline.

Medline was originally founded by A.J. Mills in 1910. Currently, the Mills family retains control of Medline despite the fresh buyout. A key term of the deal is that the Mills family will retain its leadership of Medline and hold its stake as the largest shareholder of the company. For Mills heirs, that's a pretty sweet deal.

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Medline CEO Charlie Mills has been at the helm of his family's business since 1997. In a Blackstone press release, he said, "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."

Despite the Blackstone-led buyout, it seems that Mills' role as the leader of the company won't change.

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Medline buyout is a refreshing departure from reverse mergers

Public firms buying out privately held companies is a trend that can't be ignored. This is prominent enough that speculation about a SPAC bubble has run the media gamut. A writer for the Harvard Business Review published in February, said "Research shows that when more people adopt a practice, it will become increasingly widespread due to growing awareness and legitimacy. [...] Things get a little more complicated for controversial practices like SPACs and reverse mergers, where third-party concern and skepticism also grows as the practice becomes more widely used."

Medline's decision to remain private shows Mills' dedication to family ownership. It isn't a surefire route to continued success, but a private equity buyout is definitely a departure from the current market trends. For Medline as well as Blackstone and Carlyle shareholders, rallying support could be an unofficial term of the deal.

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