Machinery / Industrial Parts & Tools

It is learned that a consortium of private equity companies recently reached an agreement to acquire Medline Industries, a manufacturer and distributor of medical supplies. The completion of this transaction will become one of the largest leveraged buyouts in history.

Medline announced on Saturday (June 5) that a number of private equity investment companies, including Blackstone group Inc., Carlyle group Inc. and Hellman&Friedman, have agreed to acquire a majority stake in it. The company did not disclose the financial terms of the transaction, but it is expected that the transaction will be completed by the end of 2021.

01

The king of capital, Blackstone, and Carlyle have a big deal

It is understood that the acquisition valued Medline at more than 30 billion U.S. dollars (excluding debt). Including debt, the value of this transaction is as high as 34 billion U.S. dollars, equivalent to 210 billion yuan. The Singapore Government Investment Corporation (GIC Pte) will also invest as part of the partnership.

Blackstone Group: Founded by Peter G. Peterson and Stephen A. Schwarzman in 1985, it is an American alternative asset management company and also known as the king of capital, focusing on private equity investment and real estate investment. Blackstone is one of the largest investment groups known for leveraged buyouts. Since its establishment, it has completed investments in many well-known companies, including office property investment trust companies, Hilton Hotel Group, etc. After more than 20 years of development, the Blackstone Group has grown into one of the world's largest private equity companies. In 2007, Blackstone completed an IPO, raising a total of 7.6 billion US dollars, becoming the first private equity company ever to go public. The Blackstone Group is headquartered in New York, USA, and has offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, San Francisco, London, Paris, Mumbai, Hong Kong, Beijing, Shanghai and Tokyo.

The Carlyle Group: Listed on Nasdaq in the United States, it is a global alternative asset management company founded in 1987. The company is headquartered in Washington and has more than 1,575 employees in 31 offices on six continents. As of March 31, 2018, Carlyle had assets under management of US$201 billion and owned 324 investment funds.

02

The ninth largest medical device company in the world

MedlineMedline was founded in 1966 by brothers James and Jon Mills. Its origin can be traced back to 1910; it went public in 1972, James Mills had served as the CEO of Medline for many years and died in 2019; the current CEO is his son Charlie. The family-owned company provides more than 550,000 medical products and clinical solutions, including surgical gowns, examination gloves and diagnostic equipment, as well as consumer-oriented brands such as Cullard bandages.

In addition to the accumulated development of its own business, Medline has continued to expand and enrich its product line through mergers and acquisitions. On June 6, 2019, Medline Industries announced the acquisition of AngioDynamics' Namic fluid management business portfolio for US$167.5 million. And spent 29 million US dollars to acquire SensiCare and Aloe Vesta series skin care products from ConvaTec. In addition, in May 2021, it acquired a large part of its respiratory system business from the 41st-ranked medical device company Teleflex for US$286 million. The acquisition is expected to be completed in the third quarter of 2021.

At present, Medline manufactures and sells medical equipment and supplies used in hospitals, surgical centers, emergency rooms and other medical facilities in more than 125 countries, from surgical gloves to wheelchairs, from masks to thermometers.

03

The epidemic has created the world's largest manufacturer of private medical supplies

As the COVID-19 pandemic intensifies in 2020, Medline reprocesses tens of thousands of N95 respirators and other face masks in its facilities every day," and begins producing hand sanitizers at an infection prevention product factory. The company is based in the United States. Opened several 1 million square feet or larger distribution centers, and expanded production at the Lycia Springs plant to produce 36 million masks per month.

In March last year, Medline Industries applied for tariff exemptions on 103 items imported from China, 30 of which were approved. Regarding the US government's decision to exempt tariffs, Medline Industries said it was "very helpful."

The company’s sales in 2020 were US$17.5 billion. In November 2020, Medical Design and Outsourcing, an authoritative third-party website for medical devices in foreign countries, released the list of “Top 100 Global Medical Devices” companies. Medline Industries had sales of US$13.9 billion. Ranked ninth. In this regard, Medline Industries has become the world's largest manufacturer and distributor of private medical supplies.

04

Medical device acquisition boom in 2021?

On April 11, the Italian diagnostics group DiaSorin SpA stated that it will acquire the US-based Luminex company for US$1.8 billion. This all-cash transaction will strengthen DiaSorin's molecular diagnostic technology.

Luminex was founded in 1995 and is headquartered in Texas, USA. It was listed on NASDAQ in 2000. It is a company that integrates R&D and production of bioanalytical instruments and uses them in the fields of life sciences and clinical diagnosis.

Siemens Medical announced on April 15 that it has successfully completed the acquisition of Varian Medical Systems. The acquisition transaction was previously disclosed on August 2, 2020. According to reports, with the completion of the acquisition, Varian is expected to make a positive contribution to Siemens Medical’s earnings per share within the first 12 months. Siemens Medical’s goal is to achieve at least 300 million euros of synergy each year starting from the 2025 fiscal year.

In addition, there are many acquisition cases in the industry, such as Olympus's US$300 million acquisition of Israeli medical device company Medi-Tate Ltd; Mindray Medical intends to acquire the entire equity of Hytest Invest Oy for 545 million euros.

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If Medline Industries, valued at as high as $34 billion, succeeds, the transaction will become one of the largest leveraged buyouts in history. The company did not disclose the reason for the sale, or due to economic recession considerations in the post-epidemic era, the company can currently have a relatively high valuation.