The sale of Medline Industries Inc. to a consortium of private equity firms has brought one of the world’s wealthiest families into the limelight.
The deal, valued at more than $30 billion, stands to rank among the biggest transactions ever involving a family-owned business. The proceeds from the majority investment by Blackstone Group Inc., Carlyle Group Inc. and Hellman & Friedman will largely flow to the Mills, a Chicago-based clan who’ve been in the medical supply business for four generations.
While the private equity group will take a majority stake in Medline, the Mills family will keep their leadership roles at the company and remain its largest single shareholder. The company didn’t disclose how much the family will receive in the transaction.
The family may be worth as much as $30 billion, giving them a fortune akin to the Pritzker family, according to the Bloomberg Billionaires Index. A Medline spokeswoman didn’t immediately return a call seeking comment.
“Making healthcare run better has been our focus for decades,” said Charlie Mills, Medline’s chief executive officer in a statement Saturday. “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.”
The deal comes as soaring valuations and a potential looming hike in the capital gains tax rate prompt more families to consider selling their businesses. Private-equity firms are armed with cheap debt and are sitting on trillions of dollars to invest.
At least eight buyout firms last month had been preparing offers for Medline, some attracted by the chance to trim costs and maximize profits at a company that’s never been touched by another private-equity firm.
For the Mills, it unlocks a fortune bolstered in the past year by soaring demand for medical products amid the pandemic. The Northfield, Illinois-based company had $17.5 billion in revenue in 2020, up more than 25% from the year prior, according to trade publication Medical Design & Outsourcing.
Medline makes, sells and distributes more than half a million different kinds of medical products, including wheelchairs, urine-sample cups, face masks and anesthesia kits. The company makes the ubiquitous striped swaddling blanket that almost every U.S. hospital-born newborn is wrapped in and own brands such as Curad bandages.
The company’s roots trace to 1910 when A.L. Mills, the great-grandfather of CEO Charlie Mills, started making butcher’s aprons for Chicago slaughterhouses. He shifted to surgeon’s gowns and nurses’ uniforms after nuns at a nearby hospital sought his help. His son, Irving, joined the family business — Mills Hospital Supply — and oversaw the company’s expansion into medical textiles.
Irving’s sons James and Jon formed Medline in 1966. The second-generation leadership team of Charlie — son of James, who died in 2019 — his cousin Andy, now president, and Andy’s brother-in-law, Jim Abrams, current chief operating officer, were elevated to their roles in 1997.
While the Mills will still be closely involved in running the business and setting strategy, the deal will be transformational for a family that’s been focused on their operating business for generations and is relatively low-profile and little-known outside of Illinois.
Other families who’ve had massive windfalls, including the Pritzkers, have stepped up their philanthropic activities, become players on the national political scene and plowed money into venture capital and private equity to increase their wealth.
Whatever their plans, the deal will accelerate the need for rigorous planning, according to Samy Dwek, a consultant to high-net worth families at The Family Office Doctor.
“In this case Charlie and Andy may want to consider splitting the assets to ensure smoother transition for each of their respective families,” he said. “They are about to face some hard decisions.”
— With assistance by Michelle F Davis, and Heather Perlberg