Covetrus to launch $1.53 billion first-lien term loan on Wednesday

By Sara Rosenberg

New York, Sept. 6 – Covetrus Inc. (Corgi BidCo Inc.) is scheduled to hold a lender call at 11 a.m. ET on Wednesday to launch its $1.525 billion seven-year covenant-lite first-lien term loan, according to a market source.

Deutsche Bank Securities Inc., UBS Investment Bank, BMO Capital Markets, Mizuho Securities USA LLC, TD Securities (USA) LLC, Santander Bank and ING Capital LLC are the bookrunners on the deal, with Deutsche the left lead and administrative agent.

The first-lien term loan has 101 soft call protection for six months, the source said.

Commitments are due at 3 p.m. ET on Sept. 19.

The company is also getting a $350 million privately placed second-lien term loan.

In addition, based on the commitment letter, the company is expected to get a $300 million five-year revolving credit facility.

The commitment letter had expected first-lien term loan pricing at SOFR plus 450 basis points with 25 bps step-downs at 5x total first-lien leverage and 4.5x total first-lien leverage, a 25 bps step-down upon an initial public offering, and a 0% floor.

Official price talk on the first-lien term loan is not yet available.

Proceeds will be used to help fund the buyout of the company by Clayton, Dubilier & Rice and TPG Capital for $21.00 per share in cash, representing an enterprise value of about $4 billion.

Clayton, Dubilier & Rice currently owns around 24% of the company’s outstanding shares of common stock.

Other funds for the transaction will come from equity.

Closing is expected this year, subject to regulatory approvals, Covetrus shareholder approval and other customary conditions.

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

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