Value Investing Medline - Largest Healthcare LBO |
| Medline - Largest Healthcare LBO Posted: 05 Jun 2021 03:15 PM PDT At $34b EV likely a 20x EBITDA deal for a <10% margin business. Slowing topline growth but still a cash generative business that can do mid/high teen levered returns. Public comps are very attractively valued. If the family remains the largest shareholder that could imply ~$4b each for the 3-sponsors, and $5b stake for Mills. That leaves $29b in cash for the Mills family assuming 50/50 debt/equity! Including a basic back of the envelope take at the possible math. Haven't included a div recap which will goose up the IRR. If this is anywhere close to reality then these are very aggressive assumptions - very high entry multiple and very high leverage! **EDIT** After reading the press release on Medline website it seems to me that Medline may be retaining a much larger equity stake since the Mills are retaining full control from an economics and management standpoint. If so that can bring down the leverage considerably. This is not a traditional LBO as the news headlines are making it out to be. Think the pf ownership structure could look something like this: Mills 34%, BX, CG, HF 20% each, GIC 6% [link] [comments]  |
| Posted: 06 Jun 2021 03:45 AM PDT |
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