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COVETRUS TO DIVEST ITS SCIL ANIMAL CARE UNIT TO HESKA FOR $124 MILLION
Jan. 20, 2020
Source: Covetrus news release
Portland, ME - Covetrus (NASDAQ: CVET), a global leader in animal-health technology and services, today announced that it has entered into a definitive agreement to sell its scil animal care business ("scil") to Heska Corporation ("Heska") (NASDAQ: HSKA) for a purchase price of $125 million in cash, subject to customary closing adjustments.
The transaction is expected to close in the next 60 to 90 days, subject to customary closing conditions. Covetrus expects that net cash proceeds from the transaction, after taxes and deal-related fees, will help to reduce its net debt and to improve its leverage position. The proceeds may also be used for other general corporate purposes.
"While we are still in the early stages of executing on our strategy, this transaction is an important initial step in that process," said Ben Wolin, Covetrus acting president and chief executive officer.
The definitive agreement also includes a commercial relationship between Covetrus and Heska tied to ongoing logistics support for Heska's family of diagnostic products as well as connectivity between the Covetrus Global Technology Solutions practice information management software systems ("PIMS") and Heska's laboratory and imaging solutions.
Stifel acted as the exclusive financial advisor to Covetrus for this transaction.
Separately, Covetrus announced today an agreement to combine the company's Spain and Portugal businesses with Distrivet, the leading provider of veterinary products and services in Spain.
This new joint venture brings together two highly complementary businesses in the attractive Spanish market. Covetrus will own 50.01% of Distrivet, a Covetrus company, and the joint venture will be treated as an investment under the equity method of accounting. The transaction is expected to close in approximately 90 days, subject to satisfaction of customary closing conditions including regulatory clearance. Financial terms were not disclosed.
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