Northfield, Ill.-based Medline has recorded growth every year since it was founded in 1966 by Jim and Jon Mills and is now one of the largest manufacturers and distributors of healthcare supplies worldwide.
Last year the company reported $17.5 billion in revenue and likely will hit $19 billion this year. On June 5, the company announced a private equity transaction valued at more than $30 billion, which it expects to close later this year. Three private equity firms, Blackstone, Carlyle and Hellman & Friedman, will become investors in Medline when the transaction closes, with the Mills family remaining the largest single shareholder.
"We were already a strong company, but we became even stronger with this transaction," said Andy Mills, president of Medline. "We're gaining resources from three of the top PE firms in the world… We think we'll get a more robust pipeline of deals because while we see a lot, with these three PE firms, we'll see every single deal in healthcare."
While the company gains resources, staying largely family-owned and retaining its culture was an essential aspect of the deal. Mr. Mills said the executives still answer their own phones and make an effort to know almost everyone in the organization.
"We weren't always a big company," he said. "Years ago, when I started, we had to spell our name because nobody had ever heard of us. Until around 10 years ago, we'd call and say we're from Medline, and customers would confuse us with MetLife. We've always worked in a way where we take nothing for granted and believe in paying attention to our customers and employees. Then everything else falls into place."
To illustrate his point, Mr. Mills described a conversation he had with executives of other large healthcare companies that turned to how they treated their best customers. When it came time for him to respond, Mr. Mills said Medline doesn't have any "best" customers.
"Once you say one customer is more important, you're giving your team permission to not give their best effort to everybody," he said. "We want everybody to get our best effort. I really believe that, and from day one we emphasize how what they're working on matters to our customers and end users."
The company will retain its senior management after the private equity transaction and is focused on scaling efforts worldwide.
"Philosophically, we're always thinking about growing at a rate that is manageable because we don't want to spread ourselves too thin, but we feel it's very important to grow because our customers are expecting more from us each year, and they're under pressure to do more with less," said Mr. Mills. "We're constantly thinking about how we can work better with them. We also know our competitors aren't standing still, so we've got to grow and stay ahead."
Medline customers can expect the same level of service as the company grows, Mr. Mills said. His team aims to go beyond the supplier-provider relationship and develop solutions for clinical and business challenges alongside customers. Last year suppliers had to work hand-in-hand with providers to tackle pandemic-related issues, and the top organizations will move forward with that approach.
"For the past 15 years I've been telling customers you ought to pick who you think you can work closest with because you're going to need more than just price at the pump," he said. "You're going to need somebody to help you with operations and clinical challenges, and look at your supply chain in terms of resiliency."
Medline strengthened its domestic manufacturing last year by expanding its facility in Georgia to produce more face masks and began making hand hygiene products at its facility in Wisconsin. Mr. Mills said customers want security around where distributors procure their supplies and need domestic accessibility. Medline's new affiliation with Blackstone will contribute to future real estate expansions worldwide.
With the new investment, Medline will also focus more on automation and distribution to become more operationally efficient. As hospitals move away from strictly brick-and-mortar institutions to outpatient facilities and the hospital-at-home model, Medline is changing as well. It has 29 product divisions, all developing five to 10 new products at any given time.
"We introduce several new products each year. Some of them are pretty revolutionary and others are more line extensions, and we're going to continue that," Mr. Mills said. "I've spent a lot of time on innovation, visiting different universities and medical centers looking for new products and finding things to bring to market. Everyone in the organization is focused on that as an important driver of our future success."