Medline, the Illinois maker and distributor of medical supplies, began trading on the Nasdaq on December 17, 2025 after the largest initial public offering of the year worldwide. The company priced shares at $29, raised $6.26 billion by selling a little over 216 million shares, and closed its first day at $41, a gain of more than 41%, CNBC reported. Beyond the market headline, listings like this one raise a quieter issue for employees of private-equity-backed companies: equity that becomes liquid can create a tax bill that routine withholding does not cover.
What happened
Blackstone, Carlyle and Hellman & Friedman bought a majority stake in Medline in 2021 in a deal valued at $34 billion, at the time the largest leveraged buyout since the financial crisis. The IPO had been planned earlier in 2025 but was postponed amid tariff uncertainty and a government shutdown. At the first-day close, the company's market value was roughly $54 billion. Founded in 1966, Medline sells about 335,000 products in more than 100 countries and employed over 43,000 people at the end of 2024. It is the largest U.S. listing since Rivian in 2021, and PitchBook analysts see it as a sign that private equity owners are more willing to use public markets for exits.
Who is affected
At companies that go public, managers and key employees frequently hold restricted stock units or options granted while the business was private. Plan terms differ by company, and Medline's specific arrangements for staff are set out in its own filings, not in this article. The general pattern is what matters for planning. Restricted stock units that settle after a listing are taxed as wages at the market price on the settlement date, and insiders are typically restricted from selling for a period after an IPO.
The after-tax math
Employers usually withhold federal income tax on equity income at the flat rate for supplemental wages. Under IRS Publication 15, that rate is 22%, rising to 37% only on supplemental wages above $1 million paid to one employee in a year. A top-bracket employee owes 37% on the income, so the first $1 million of equity income can be under-withheld by as much as 15 percentage points.
Example: a married executive with $700,000 of salary receives RSUs that settle for $800,000 of stock in the year of an IPO. The figures are rounded and ignore state tax and payroll taxes.
| Amount | |
|---|---|
| RSU income at settlement | $800,000 |
| Federal withholding at 22% | $176,000 |
| Tax at 37% marginal rate | $296,000 |
| Shortfall due with the return | about $120,000 |
If the employee cannot sell during a lockup and the share price falls, the tax is still based on the value at settlement. Later gains on the shares are capital gains, and the 3.8% net investment income tax applies above $250,000 of modified AGI for joint filers.
Moves to discuss with your advisor
Employees facing a first public-market settlement often estimate the shortfall early and consider making estimated tax payments or raising withholding elsewhere to avoid underpayment penalties. Those who become heavily concentrated in one stock may weigh a staged selling plan once restrictions lift, including prearranged trading plans for insiders. Some also look at charitable gifts of appreciated shares or exchange funds to reduce concentration, each with its own tax trade-offs worth reviewing with a CPA or financial planner.
What to watch
The expiry of post-IPO selling restrictions is often a volatile moment for newly listed stocks as insiders gain the ability to sell. PitchBook's view that more private-equity-backed firms will test the market in 2026 suggests many more employees will face the same withholding arithmetic.
Sources
After TAX is an independent publication. Articles are general information, not tax, legal or investment advice. Consult a licensed professional about your situation.
