Medline Industries and the Path to Public Markets

In June 2021, a consortium of Blackstone, Carlyle, and Hellman & Friedman acquired Medline Industries — a leading medical-surgical manufacturer and distributor — in a $34 billion leveraged buyout, one of the largest in over a decade. By 2025, with a looming debt maturity wall and interest rates far above LBO assumptions, the sponsors faced a critical exit decision: take Medline public or restructure the debt. This case follows the full investment life cycle, from LBO thesis construction through four years of operational value creation to IPO pricing and execution. Students must decompose LBO returns, apply a sum-of-the-parts valuation to a hybrid manufacturer-distributor, evaluate macro timing as a strategic variable, and propose an IPO price that balances sponsor returns with aftermarket performance. The case provides a complete financial model, including historical statements, DCF, and public comparables.

By the end of the session, students will be able to:
1.Decompose LBO returns into EBITDA growth, debt paydown, and multiple expansion, and explain why the Medline case illustrates the limits of each lever.
2.Apply a sum-of-the-parts (SOTP) valuation methodology to a hybrid manufacturer-distributor, and articulate why a single blended multiple is analytically incorrect.
3.Evaluate macro timing as a strategic variable in IPO decision-making, including the role of debt maturity pressure, interest rate environment, and market window dynamics.
4.Construct and defend an IPO pricing recommendation that balances sponsor return maximisation with aftermarket performance and staged exit optionality.
5.Assess an equity story from both bull and bear perspectives, including the structural implications of governance complexity (dual-class shares, Tax Receivable Agreement) and leverage overhang.