Just weeks after choosing its name, Covetrus(CVET), not covfefe, and filing a registration statement, Henry Schein(HSIC) has set a date for the spinoff, and it’s soon. On February 4, Henry Schein will spin off HS Spinco to shareholders of record as of January 17. HS Spinco will subsequently merge with Direct Vet Marketing, Inc. (d/b/a Vets First Choice) in a Reverse Morris Trust transaction, with the resulting company being named Covetrus.
Covetrus will trade under the ticker, CVET. Henry Schein shareholders will receive 0.4 shares of Covetrus stock for every share owned of Henry Schein. They will own 63% of the combined company. The latest amended S-4 can be found here.
As we discussed earlier, Covetrus will have $1.175 billion in debt, most of which will be used to pay a special dividend to Henry Schein prior to closing, dramatically improving Henry Schein’s balance sheet, but leaving Covetrus leveraged. The debt could prove to be an anchor for Covetrus stock.
Disclosure: The author holds no position in any stock mentioned
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