Covetrus gets $300 million revolver, $350 million second-lien loan for buyout

By Mary-Katherine Stinson

Lexington, Ky., Oct. 13 – Covetrus Inc. (Corgi BidCo Inc.) entered a $300 million first-lien revolving credit facility and a $350 million second-lien term loan on Oct. 13, portions of which were used to help fund the buyout of the company by Clayton, Dubilier & Rice, LLC and TPG Capital, Inc., according to an 8-K filing with the Securities and Exchange Commission.

The revolver will mature on Oct. 13, 2027 and will bear interest at SOFR, Euribor, CDOR, Sonia or Saron (as applicable) plus 450 basis points. Each rate is subject to a 0% floor.

The second-lien term loan facility matures on Oct. 13, 2030 and will bear interest at SOFR plus 925 bps subject to a 1% floor.

Borrowings will not be subject to amortization.

The term loan facility may be prepaid at any time, subject to minimum principal amount requirements. Voluntary prepayments made in connection with a repricing transaction, made using the proceeds of refinancing or unpermitted debt or made in connection with a change-of-control offer on or prior to Oct. 13, 2023 are subject to a 2% prepayment premium. Prepayments made after Oct. 13, 2023 but on or prior to Oct. 13, 2024 are subject to a 1% prepayment premium.

Borrowers will be required to prepay the loans under the agreements, subject to certain exceptions, thresholds and reinvestment rights, with a specified percentage of the net cash proceeds of certain asset sales, the net cash proceeds of certain debt offerings and excess cash flow.

The buyout of the company closed on Oct. 13 by Clayton, Dubilier & Rice and TPG Global.

Covetrus was acquired for $21.00 per share in cash, representing an enterprise value of about $4 billion.

Clayton, Dubilier & Rice owned around 24% of the company’s outstanding shares of common stock at the time of the acquisition.

Previously reported, the financing included a $1.525 billion seven-year covenant-lite first-lien term loan (B1/B-) that priced at 94.

Covetrus is a Portland, Me.-based animal-health technology and services company.

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