To The Moon

Medline Soars Over 41% in First Day of Trading

This year's largest U.S. IPO has officially landed—Medline Inc. has raised $6.26 billion.

$Medline Inc(MDLN)$   opened more than 20% higher in its Nasdaq debut under the ticker symbol “MDLN” and finished the session up 41%. The IPO followed an upsized offering priced at the top of its marketed range at $29 per share, with 216 million shares issued.

Data shows that in the past decade, only five companies have raised over $5 billion in a U.S. IPO. Medline, with its $6.26 billion raise, joins this exclusive club alongside $Uber Technologies (UBER.US)$ , $Lineage (LINE.US)$, $Rivian Automotive (RIVN.US)$, and $Arm Holdings (ARM.US)$.

What is Medline?

Founded in 1966 and headquartered in Northfield, Illinois, Medline is the world's largest privately held manufacturer and distributor of medical supplies. Its product portfolio spans surgical consumables, gloves, personal protective equipment (PPE), wound care, and laboratory reagents. It serves a wide range of clients, including hospitals, clinics, surgery centers, long-term care facilities, and home health providers.

Medline is not merely a "white-label" distributor. It operates a hybrid model:

~Manufacturing: It produces goods under its own Medline Brand (manufactured across multiple global facilities).

~Distribution: Through its Supply Chain Solutions, it provides logistics and supply chain optimization services.

The company has built a massive supply chain network comprising 69 global distribution centers and a proprietary fleet of 2,000+ trucks, enabling next-day delivery for approximately 95% of its U.S. customers.

Previously controlled by private equity giants Blackstone, Carlyle, and Hellman & Friedman following a ~$34 billion buyout in 2021, the company has since accelerated its business integration and global expansion.

Fundamental Highlights

Massive Scale, Steady Growth

~2024 Full Year: Net sales reached approximately $25.5 billion, with healthy net profit growth and solid cash flow generation.

~2025 Performance: For the first nine months of 2025, net sales were 10.3% higher than the same period in 2024, while adjusted EBITDA grew by 4.4%.

~Track Record: Medline has achieved over 50 consecutive years of annual net sales growth and projects continued high-single-digit growth.

These figures demonstrate that Medline does not rely on short-term price volatility or a single product hit. Instead, it scales through long-term stability and a predictable growth path in the medical consumables sector. Profitability has also improved significantly over the last two years.

Dual Core Business: Strong Operating Leverage & Supply Chain Moat

Medline's operations are divided into two main segments:

Medline Brand (Proprietary Products):

~High Margin: Contributes the bulk of the group's EBITDA, demonstrating strong product competitiveness.

Supply Chain Solutions (Distribution):

~High Volume: Lower margins but massive sales volume, reflecting operational scale and deep customer relationships.

This hybrid "Manufacturing + Distribution + Strategic Contracts" model offers three hard-to-replicate advantages:

~SKU Depth: A portfolio exceeding 330,000 SKUs, covering the entire medical consumables ecosystem.

~Logistics Power: A network of 2,000+ MedTrans trucks and global distribution centers provides critical supply chain resilience.

~High Stickiness: Long-term supply agreements with over 1,300 healthcare institutions create high switching costs for hospitals and clinics.

Strong Defensiveness & Stable Cash Flow

~"Infrastructure-like" Defense: Medical supplies (e.g., gloves, surgical kits) are essential goods for hospitals. Demand is inelastic to economic cycles, making Medline’s revenue and cash flow highly stable and naturally resistant to macro volatility.

~Structural Growth Drivers: Growth is driven by long-term trends: global aging, chronic disease management, and the expansion of care settings. This is a "steady compounder" model rather than a high-beta explosive growth model.

~IPO to Optimize Capital Structure：The primary use of IPO proceeds is to pay down debt inherited from the previous leveraged buyout (LBO). This move will significantly strengthen the balance sheet, reduce financial risk, and lay the groundwork for sustainable long-term operations.

Investment Thesis: Why is it Worth Watching?

Logic 1: Robust Industry + Essential Income

~Medical supplies are "defensive consumption." Even in an economic slowdown, procurement by hospitals and care facilities remains stable or grows slowly. This attribute is particularly scarce in high-volatility markets.

Logic 2: Predictability of Cash Flow & Profits

~Medline's multi-year streak of revenue growth supports long-term cash return strategies (dividends/buybacks) and reduces the pressure to justify valuations solely through hyper-growth.

Logic 3: Scarcity of Market Position

~As one of the largest medical supply providers in the U.S. and globally, Medline possesses significant pricing power and customer stickiness. It is far more than a simple "white-label distributor."

Potential Risks to Monitor

~Debt Pressure Remains: While IPO proceeds will pay down some debt, investors must monitor the sustainable coverage of remaining leverage via future cash flows.

~Slower Growth Pace: Unlike innovative biotech or tech sectors, medical consumables are a stable-growth industry. Valuation premiums should be assessed with this moderate growth profile in mind.

~Supply Chain & Tariff Risks: A portion of proprietary products relies on global supply chains, making the company susceptible to potential tariffs and trade policy shifts.

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