Back in April, Henry Schein, Inc.(HSIC) announced that it would be spinning off its Animal Health business and merging it with Vets First Choice in a Reverse Morris Trust transaction. At the time, the company projected the transaction would be completed in the fourth quarter of 2018, but it has since slipped into the first quarter of 2019. Schein said its shareholders would own 63% of the combined company, which had $3.6 billion in 2017 pro forma revenue. Schein also expects to receive a cash dividend in the deal of between $1 billion and $1.25 billion, presumably leaving the new company with a great deal of debt. The company expects significant benefit from the merger:
HSAH and Vets First Choice expect synergies to grow annually such that in year three, operating income synergies for the combined business will be in excess of $100 million, driven largely by accelerated revenue growth from the adoption of the Vets First Choice platform across the HSAH customer base.
Last week, Schein finally announced a name for the new Animal Health company– Covetrus. As usual the company is more than happy to share the derivation of its new name, much as your coworkers are happy to share the details of their family holiday dinners with you as you desperately try to will an urgent meeting into existence.
Covetrus reflects the company’s deep partnership with the veterinary community and its efforts to “Advance the World of Veterinary Medicine.” “Co-” highlights working together as partners, anchored by “vet” at the center of what the company will do, and “-us” reinforces the notion of a team of professionals who will serve as an extension of the veterinary practice.
“It was important to create a new brand and new name that demonstrates our long-term commitment for veterinary practice customers to always be at the center of our business. We are committed ‘To Advancing the World of Veterinary Medicine’ by empowering our customers with compelling new capabilities and services to drive new health and financial outcomes to ensure their continued success,” said Benjamin Shaw, Founder and CEO of Vets First Choice. “Covetrus reflects the excitement around our unique capabilities and differentiated value proposition that this combined entity will deliver to veterinary customers across the globe.
No word on what the ‘r’ is for.
Covetrus also announced its new management team
As previously announced, Benjamin Shaw will become CEO of the combined company and serve as a member of the Board of Directors. The executive leadership team of Covetrus will include:
- Christine T. Komola, Executive Vice President and Chief Financial Officer
- Erin Powers Brennan, Senior Vice President, General Counsel and Secretary
- Russell Cooke, Senior Vice President and Operational Chief Financial Officer
- Francis X. Dirksmeier, Senior Vice President and President, North America
- David Christopher Dollar, Senior Vice President and President, Software and Services
- Michael Ellis, Senior Vice President and President, Europe
- David Hinton, Senior Vice President and President, APAC and Emerging Markets
- Timothy Ludlow, Senior Vice President and Chief Transformation Officer
- Anthony Providenti, Senior Vice President, Corporate Development
- Georgina Wraight, Senior Vice President and President, Vets First Choice
- James Young, Senior Vice President and Chief Human Resources Officer
“This is an impressive and talented leadership team, and we are honored to lead this soon-to-be new independent organization,” said Shaw. “This executive team will ensure strong continuity of leadership across all lines of business and geography and includes new talent to facilitate a smooth transition into an independent public company. Importantly, our team is committed to meeting and exceeding the expectations of our customers.”
Covetrus will have over 5,000 employees and 10,000 customers.
Disclosure: The author has no position in any stock mentioned
We really should put together a (running) list of best/worst spinoff names. I’m still partial to Mondelez as amongst the worst, but would be fun to debate.
I’d have to say Tronc is the worst(not that Mondelez is great).