World’s Third-Biggest Wealth Fund Joins Medline Buyout Group

© Reuters.

(Bloomberg) — Abu Dhabi Investment Authority is joining one of the biggest leveraged buyouts of all time by investing about $1 billion alongside a consortium acquiring medical supply company Medline Industries Inc.

The world’s third-biggest wealth fund, known as ADIA, will back the takeover of Medline by Blackstone Group (NYSE:) Inc., Carlyle Group (NASDAQ:) Inc. and Hellman & Friedman, according to people familiar with the matter, who asked not to be identified discussing confidential information. Singapore’s state-owned investor GIC Pte is also investing in the deal, which values Medline at more than $30 billion.

A spokesperson for ADIA confirmed the investment in response to Bloomberg queries. Abu Dhabi’s rainy-day fund has amassed just under $700 billion in assets, according to estimates from Global SWF and the SWF Institute, with a mandate to funnel the government’s oil surplus into foreign holdings.

Medline is the biggest private U.S. manufacturer and distributor of medical supplies like gloves, gowns and exam tables to hospitals and doctor’s offices. The private equity consortium beat out Canadian investment giant Brookfield Asset Management Inc., which was bidding on its own, to acquire the business.

ADIA has been seeking to take advantage of the relationship it enjoys as a backer of some of the world’s larger buyout firms and join in on more deals. Last year, it agreed to invest along with Advent International and Cinven on their $19 billion buyout of Thyssenkrupp (DE:) AG’s elevator unit. The fund was part of a consortium that bought Nestle SA’s $10 billion skincare business in 2019.

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It’s also ADIA’s second health-care deal in quick succession. In May it took a minority stake in health-care software provider Dedalus Holding from private equity company Ardian.

The sovereign fund has been building out its own team of private equity professionals, which allows it to make more of its own direct investments. This month, it added another senior hire to its in-house data analysis and artificial intelligence team, set up to develop new investment strategies.

(Updates with ADIA’s estimated holdings in third paragraph.)

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