Medline Shares Soar 41% Following 2025's Largest IPO Raising $6.3 Billion, Why Capital Is Scrambling for Healthcare Giant?

TradingKey - Medical supply giant Medline's stock surged 41% on its Nasdaq debut on Wednesday, closing at $41 per share, boosting its market capitalization to $54 billion.

The IPO offered 216 million shares at an offering price of $29 per share, raising $6.26 billion, which not only set a new record for global IPO size in 2025 but also became the largest initial public offering in the U.S. stock market since Rivian in 2021.

Medline CEO Jim Boyle emphasized on the listing day, “Historically, we’ve done very little advertising, very little marketing, and this gives us a way to amplify our voice and actually expand really the receptivity of who we are.”

The IPO Journey

Back in 2021, private equity behemoths Blackstone, Carlyle, and Hellman & Friedman acquired a controlling stake in Medline through a $34 billion leveraged buyout, marking the largest leveraged buyout in the healthcare industry at the time.

Four years later, during an upward capital cycle, they facilitated its return to the public market. Based on a post-IPO valuation of $50 billion, the three funds' potential paper gains have already exceeded 40%.

However, Medline's path to going public was not smooth during the four years from its private equity acquisition to its re-entry into the public market.

The company had confidentially submitted its listing application to the SEC late last year, but uncertainty surrounding tariff policies forced the postponement of its H1 2025 IPO plans. In the second half of the year, the U.S. government shutdown further disrupted the preparation timeline, ultimately leading to a public submission of the application during the shutdown (before its end on November 12).

Despite these setbacks, market enthusiasm remained strong—insiders revealed that the IPO received subscription orders more than 10 times the number of shares offered. "The subscription was very active, allowing us to select suitable long-term investors for our business," said Jim Boyle.

This fundraising scale not only surpassed last year's $5.1 billion for Lineage (controlled by Bay Grove Capital), making it the largest private equity-backed IPO in the U.S. to date, but also signals an impending wave of private equity exits in 2026, with Blackstone-backed Copeland and EQT AB's Reworld, among others, already planning U.S. listings.

The offering was led by Goldman Sachs, Morgan Stanley, Bank of America, and JPMorgan Chase, with 21 co-book-running managers and 21 co-managers also participating. Shares trade under the ticker "MDLN" on the Nasdaq Global Select Market.

Medline's Core Competencies

Founded in 1966 by brothers Jon Mills and Jim Mills, Medline specializes in manufacturing and distributing medical supplies used by hospitals and physicians. Its product line encompasses hundreds of thousands of items, including gloves, surgical gowns, and examination tables. Its client base spans healthcare institutions in 125 countries worldwide, and in North America, it is considered one of the "big three" hospital supply systems alongside Cardinal Health and Owens & Minor.

Medline leverages its robust supply chain to achieve next-day delivery service (for 95% of its U.S. customers), enhances profit margins by substituting third-party products with its own brands, and builds industry barriers with its portfolio of 335,000 medical and surgical products.

Data shows that for the nine months ended September 27, 2024, the company's revenue reached $20.6 billion (a year-over-year increase of 10.2%), with net income of $977 million (a year-over-year increase of 7.2%).

As the world's largest privately held medical supplies distributor, it benefits from both manufacturing economies of scale and the high inventory turnover characteristic of the distribution industry, achieving a gross margin of 32% in 2024, leading the industry.

Emerging Concerns

Despite its strong debut, Medline's long-term challenges cannot be overlooked.

According to its prospectus, the $6.26 billion raised from this offering will primarily be used to repay a substantial $16.8 billion debt —meaning private equity shareholders gained liquidity through the IPO, but the company remains burdened by a heavy financial load. More critically, Medline anticipates tariffs will erode $150-200 million in pre-tax profit in fiscal year 2026, and supply chain restructuring costs will continue to suppress profitability.

The market's sustained enthusiasm for large IPOs also faces scrutiny. Design software company Figma, which listed in July this year, achieved a $6 billion valuation on its debut, but its share price subsequently plummeted by 70%.

Furthermore, policy uncertainty persists in the U.S. healthcare industry. The anticipated deregulation under a potential second Trump administration has not yet materialized, while issues such as tariff policies, Medicaid benefit reductions, and the expiration of Affordable Care Act subsidies continue to cast a shadow over the sector.

Signs of an IPO Market Rebound

Medline's successful listing has injected a strong boost into the U.S. IPO market for 2025. Bloomberg data indicates that the total value of U.S. IPOs (excluding SPACs) this year has reached $46 billion. While still below the pre-pandemic ten-year average of $50 billion, this represents a significant improvement compared to 2024.

More importantly, the successful listing of this medical supply giant has boosted market expectations for a potential IPO wave in 2026, with tech darlings like Databricks and Canva poised to follow suit.

IPOX analyst Lukas Muehlbauer commented, "As the largest deal of the year, Medline's listing will serve as a key indicator for investor confidence in 2026, not just within the healthcare sector, but across the entire capital market."