Covetrus Launches on NASDAQ February 8

Covetrus is entering the animal health market as a result of the merger of Henry Schein and Vets First Choice.
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Soon-to-be global animal health leader Covetrus (Nasdaq: CVET), the new company resulting from the merger of Henry Schein animal health and Vets First Choice, will list on NASDAQ on February 8.

Upon listing, Covetrus will become the second-largest pure play animal health company by revenue, and will be positioned to disrupt the $150Bn fragmented animal health market. Its entry will help veterinarians meet the $5Bn gap in animal care—where 70% of the market (10.5 million animals) is untreated (see slide 17 in investor deck here).

According to sell-side analysts at healthcare investment bank SVBLeerink, CVET’s listing will be a “significant positive event” that “should unlock value” for investors in the high-opportunity veterinary market.

COVETRUS

Market Opportunity

  • The animal health market is rich with opportunity, with the global animal health industry being valued at +$150B.
  • Specifically, the global veterinary software market – a key Covetrus offering – is expected to reach ~$600 Million by 2022 from ~$450 Million in 2017, at a CAGR of 6.1%, according to Markets and Markets.
  • Covetrus will have a +100K customer base, with significant white space for growth in the promising animal health market.
  • Covetrus will operate in an underserved market to address a $5 billion gap in care.

Differentiators

  • Covetrus will unite two unique, complementary businesses that will provide a comprehensive platform and supply chain infrastructure fully dedicated to supporting the veterinary channel.
  • The company’s portfolio will span from product and inventory management, to analytics that help drive better medical compliance, to an integrated platform that engages clients, saves staff time and drives revenues. No other company provides such an integrated scope of solutions.

Company Financials

  • Covetrus had ~$3.7 billion in pro forma combined net sales in the fiscal year which ended December 30, 2017, and expects to enhance growth opportunities by expanding sales through its existing large base of customers and clients, and securing new client opportunities in the future.
  • The company estimates ~$4 billion pro forma revenue in 2018.

About Covetrus

Covetrus is a global animal-health technology and services company supporting the companion, equine, and large-animal veterinary markets. We provide a comprehensive suite of products, software, and services to help drive improved patient health, strong client relationships, and successful financial outcomes for veterinary professionals.

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