UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934

(Amendment No. 4)*

 

 

Covetrus, Inc.

(Name of Issuer)

Common Stock, $0.01 par value

(Title of Class of Securities)

22304C100

(CUSIP Number)

CD&R VFC Holdings, L.P.

c/o Clayton, Dubilier & Rice, LLC

Attention: Rima Simson

375 Park Avenue

New York NY 10152

(212) 407-5227

with a copy to:

Debevoise & Plimpton LLP

Attention: Nicholas P. Pellicani, Esq.

919 Third Avenue

New York, NY 10022

(212) 909-6000

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

May 19, 2022

(Date of Event Which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because § 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g) check the following box  ☐.

 

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7(b) for other parties to whom copies are to be sent.

 

 

 

*	The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

CUSIP No. 22304C100

 

1.		NAME OF REPORTING PERSON     CD&R VFC HOLDINGS, L.P.
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)   (a)  ☐        (b)  ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS (SEE INSTRUCTIONS)     SC
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)     ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION     CAYMAN ISLANDS

Number of Shares Beneficially Owned by Each Reporting Person With				7.		SOLE VOTING POWER     33,670,541 (see Item 5)
				8.		SHARED VOTING POWER     0
				9.		SOLE DISPOSITIVE POWER     33,670,541 (see Item 5)
				10.		SHARED DISPOSITIVE POWER     0

11.		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON     33,670,541 (see Item 5)
12.		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)     ☐
13.		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)     24.15% (see Item 5)1
14.		TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)     PN

 

1	Based on 139,405,751 shares of Common Stock outstanding as of April 29, 2022, based on the Issuer’s Form 10-Q for the quarter ended March 31, 2022, filed on May 5, 2022.

 

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CUSIP No. 22304C100

 

1.		NAME OF REPORTING PERSON     CD&R INVESTMENT ASSOCIATES IX, LTD.
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)   (a)  ☐        (b)  ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS (SEE INSTRUCTIONS)     SC
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)     ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION     CAYMAN ISLANDS

Number of Shares Beneficially Owned by Each Reporting Person With				7.		SOLE VOTING POWER     33,670,541 (see Item 5)
				8.		SHARED VOTING POWER     0
				9.		SOLE DISPOSITIVE POWER     33,670,541 (see Item 5)
				10.		SHARED DISPOSITIVE POWER     0

11.		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON     33,670,541
12.		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)     ☐
13.		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)     24.15% (see Item 5)1
14.		TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)     CO

 

 

1	Based on 139,405,751 shares of Common Stock outstanding as of April 29, 2022, based on the Issuer’s Form 10-Q for the quarter ended March 31, 2022, filed on May 5, 2022.

 

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EXPLANATORY NOTE

This Amendment No. 4 amends the Statement on Schedule 13D (“Schedule 13D”) initially filed on February 11, 2019 with the U.S. Securities and Exchange Commission and amended by Amendment No. 1 filed on May 1, 2020, Amendment No. 2 filed on May 20, 2020 and Amendment No. 3 filed on November 20, 2020 by (i) CD&R VFC Holdings, L.P., a Cayman Islands exempted limited partnership (“CD&R Holdings”), and (ii) CD&R Investment Associates IX, Ltd., a Cayman Islands exempted company (“CD&R Holdings GP” and, together with CD&R Holdings, the “Reporting Persons”).

ITEM 2. IDENTITY AND BACKGROUND.

Schedule A of the Schedule 13D is hereby amended and restated in its entirety in the form attached hereto and incorporated by reference herein.

ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

Item 3 of the Schedule 13D is hereby supplemented to include the following information:

To finance the transaction contemplated by the Proposal (as defined below), affiliates of the Reporting Persons and of TPG Global, LLC (“TPG”) expect to enter into one or more debt commitment letters with third parties and equity commitment letters with their managed investment funds. Any third party financing for the transactions contemplated by the Proposal remains subject to negotiation of definitive agreements on terms acceptable to the Sponsors (as defined below). It is anticipated that a portion of the funding for the Proposal will be equity financing in the form of rollover equity from CD&R Holdings.

ITEM 4. PURPOSE OF TRANSACTION.

Item 4 of the Schedule 13D is hereby supplemented to include the following information:

On May 19, 2022, Clayton, Dubilier & Rice, LLC and TPG (together, the “Sponsors”) submitted a letter setting forth a non-binding proposal to acquire all of the outstanding shares of Common Stock of the Issuer that are not owned by the Sponsors or their affiliates for cash consideration of $21.00 per share of Common Stock (the “Proposal”) to a transaction committee of the board of directors of the Issuer (the “Board”) comprised of non-management directors that are independent of the Reporting Persons and their affiliates (the “Transaction Committee”).

The Proposal does not create any legal obligations and no such obligations will arise unless and until definitive transaction documentation with the Issuer has been executed and delivered. No binding obligation on the part of the Reporting Persons or any of their affiliates will arise with respect to the filing of this Schedule 13D. While the Proposal remains under consideration by the Transaction Committee, the Reporting Persons and their affiliates expect to respond to inquiries from, and negotiate the terms of the Proposal with, the Transaction Committee and its representatives. The Reporting Persons do not intend to provide additional disclosures regarding the Proposal until a definitive agreement has been reached or unless disclosure is otherwise required under applicable U.S. securities laws. Affiliates of the Reporting Persons and of TPG also expect to continue to engage in discussions and negotiations with potential financing sources and enter into one or more definitive debt commitment letters with third parties and equity commitment letters with their managed investment funds.

The Proposal may result in one or more of the transactions, events or actions specified in clauses (a) through (j) of Item 4 of Schedule 13D, including, without limitation, an acquisition of additional securities of the Issuer, an extraordinary corporate transaction (such as a merger) involving the Issuer, delisting of the Common Stock from the Nasdaq Global Select Market and other material changes in the Issuer’s business or corporate structure.

Prior to the making of the Proposal, on May 19, 2022, the Issuer granted CD&R Holdings a limited waiver (the “Limited Waiver”) of the standstill restrictions contained in the Investment Agreement in order to permit the submission of the Proposal, as well as to permit CD&R Holdings to pursue, develop and, if later approved by the Board upon the recommendation of the Transaction Committee, enter into the transaction contemplated by the Proposal.

 

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No assurances can be given that a definitive agreement will be reached or that the transaction contemplated by the Proposal will be consummated. The Sponsors reserve the right to modify or withdraw the Proposal at any time. Subject to the restrictions set forth in the Investment Agreement, as modified by the Limited Waiver, the Reporting Persons reserve the right to formulate other plans or make other proposals which could result in one or more of the transactions, events or actions specified in clauses (a) through (j) of Item 4 of Schedule 13D, and to modify or withdraw any such plan or proposal at any time. Subject to the restrictions set forth in the Investment Agreement, as modified by the Limited Waiver, if the transaction contemplated by the Proposal is not consummated, the Reporting Persons and their affiliates will continue to regularly review and assess their investment in the Issuer and, depending on market conditions and other factors, may determine, from time to time, to engage in any of the events set forth in clauses (a) through (j) of Item 4 of Schedule 13D.

The foregoing descriptions of the Proposal and the Limited Waiver do not purport to be complete and are subject to, and qualified in its entirety by, the full text of such documents, which are attached hereto as Exhibits 99.8 and 99.9, respectively.

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.

Item 5 of the Schedule 13D is hereby amended by deleting paragraphs (a)(i), (b) and (c) in their entirety and replacing them as follows:

(a)    

(i) CD&R Holdings is the beneficial owner and direct holder of 33,670,541 shares of Common Stock. 11,066,478 of such shares of Common Stock were acquired by CD&R Holdings on February 7, 2019 in connection with the Merger, 14,357,478 of such shares of Common Stock were issued on September 9, 2020 upon conversion of 159,368 shares of the Issuer’s 7.5% Series A Convertible Preferred Stock (the “Series A Preferred Stock”), at the option of the Issuer, pursuant to the terms of the Certificate of Designations, and 8,246,585 of such shares of Common Stock were issued on November 18, 2020 upon conversion by the Issuer of 90,632 shares of Series A Preferred Stock, at the option of the Issuer, pursuant to the terms of the Certificate of Designations and following approval by the Issuer’s stockholders on November 17, 2020 of the conversion of all outstanding shares of Series A Preferred Stock into Common Stock, which included accrued dividends in respect of the 90,632 shares of Series A Preferred Stock in the form of 81,540 shares of Common Stock. CD&R Holdings’ ownership interest is approximately 24.15% of the outstanding shares of Common Stock, based on 139,405,751 shares of Common Stock outstanding as of April 29, 2022, as reported in the Issuer’s Form 10-Q, filed with the SEC on May 5, 2022.

(b) In addition to the description set forth above in Item 5(a), see the cover pages of this Schedule 13D for indications of the respective voting powers and disposition powers of the Reporting Persons.

(c) Except as otherwise described in Item 5 of this Schedule 13D, each of the Reporting Persons reports that neither it, nor to its knowledge, any other person named in Schedule A of this Schedule 13D, has effected any transactions in shares of Common Stock in the past 60 days.

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

Item 6 of the Schedule 13D is hereby supplemented to incorporate by reference the information set forth in Item 4 above.

 

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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.

 

Exhibit Number		Description of Exhibit
99.8		Letter, dated May 19, 2022, from the Sponsors to the Transaction Committee
99.9		Limited Waiver, dated May 19, 2022
99.10		Joint Filing Agreement

 

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SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: May 20, 2022

 

 

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SCHEDULE A

The business address for each of the persons listed below is c/o Clayton, Dubilier & Rice, LLC, 375 Park Avenue, 18th Floor, New York, New York 10152, and the business telephone number of each such person is 212-407-5200.

 

Name		Title/Principal Occupation or Employment		Citizenship
Donald J. Gogel		Mr. Gogel is a director and officer of CD&R Investment Associates IX, Ltd.		United States of America
Nathan K. Sleeper		Mr. Sleeper is a director and officer of CD&R Investment Associates IX, Ltd.		United States of America
Richard J. Schnall		Mr. Schnall is an officer of CD&R Investment Associates IX, Ltd.		United States of America
David A. Novak		Mr. Novak is an officer of CD&R Investment Associates IX, Ltd.		United States of America
Rima Simson		Ms. Simson is an officer of CD&R Investment Associates IX, Ltd.		United States of America
Jessie Pamas		Ms. Pamas is an officer of CD&R Investment Associates IX, Ltd.		United States of America
Theresa A. Gore		Ms. Gore is an officer of CD&R Investment Associates IX, Ltd.		United States of America
Jillian C. Griffiths		Ms. Griffiths is an officer of CD&R Investment Associates IX, Ltd.		United States of America

 

 

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Exhibit 99.8

Clayton, Dubilier & Rice, LLC and TPG Global, LLC

May 19, 2022

Transaction Committee of the Board of Directors

Covetrus, Inc.

7 Custom House St.

Portland, Maine 04101

Dear Members of the Transaction Committee of the Board of Directors:

Pursuant to and in accordance with the limited standstill waiver that has been granted under the Investment Agreement, dated as of April 30, 2020, by and among Covetrus, Inc., a Delaware corporation (the “Company”) and CD&R VFC Holdings, L.P., a Cayman Islands exempted limited partnership (“CD&R Holdings”), Clayton, Dubilier & Rice, LLC (“CD&R”), on behalf of its managed investment funds (the “CD&R Funds”), and TPG Global, LLC (“TPG” and together with CD&R, the “Sponsors”), on behalf of its managed investment funds (the “TPG Funds” and, together with the CD&R Funds, the “Sponsor Funds”) are pleased to submit this non-binding proposal to acquire all of the outstanding shares of common stock (the “Common Stock”) of Covetrus, Inc. (the “Company”) not already owned by the CD&R Funds for cash consideration of $21.00 per share (our “Proposal”). Our Proposal is informed by prior exploratory discussions with the Transaction Committee of the Board of Directors (the “Transaction Committee”) and its advisors regarding a potential transaction, as well as our review of due diligence information provided as part of this exploratory process.

We believe that our Proposal, which represents a 35% premium to the Company’s 30-day VWAP, reflects an extremely attractive value for the Company’s public stockholders. Our Proposal provides the Company’s stockholders with an opportunity to derisk their investment in the Company by obtaining immediate liquidity and certainty of value at a significant premium to the current share price and recent trading levels.

Our Proposal assumes a recapitalization of the Company’s indebtedness with new debt financing to be arranged by the Sponsors. The equity financing to support the Proposal would be funded by the rollover of CD&R Holding’s existing 24.2% common stock ownership interest in the Company and new cash equity to be provided by the CD&R Funds and the TPG Funds.

This Proposal has been approved by the investment committees of both CD&R and TPG. While we believe we have maximized the certainty of our Proposal and our ability to move expeditiously toward signing with finalization of our work, our Proposal does remain subject to the negotiation and execution of mutually acceptable definitive agreements. Concurrently with the delivery of this offer letter, we have separately provided to your advisors copies of a markup of the draft merger agreement provided by your counsel as well as forms of equity and debt commitment letters, and we are confident that we will be able to reach agreement on definitive transaction documents on an expedited basis.

Our Proposal is a non-binding expression of interest only and does not constitute an offer subject to binding acceptance. We reserve the right to withdraw or modify our Proposal at any time. No legal obligation with respect to our Proposal or any other transaction shall arise unless and until we have executed definitive transaction documentation with the Company. As required by applicable law, CD&R intends to promptly file an amended Schedule 13D reflecting the submission of this Proposal.

We look forward to working with the Transaction Committee and its advisors to complete our confirmatory due diligence and the negotiation and execution of mutually acceptable definitive agreements.

Sincerely,

/s/ Sarah Kim

Sarah Kim

Partner, Clayton, Dubilier & Rice, LLC

/s/ Ravi Sachdev

Ravi Sachdev

Partner, Clayton, Dubilier & Rice, LLC

/s/ Jeffrey K. Rhodes

Jeffrey K. Rhodes

Co-Managing Partner, TPG Global, LLC

/s/ Kendall R. Garrison

Kendall R. Garrison

Partner, TPG Global, LLC

Exhibit 99.9

May 19, 2022

CD&R VFC Holdings, L.P.

c/o Clayton, Dubilier & Rice, LLC

375 Park Avenue, 18^th Floor

New York, New York 10152

Attention:     Sarah Kim

Email:          skim@cdr-inc.com

Re: Investment Agreement – Limited Waiver

Ladies and Gentleman:

Reference is made to that certain Investment Agreement, dated as of April 30, 2020 (the “Investment Agreement”), by and among Covetrus, Inc., a Delaware corporation (the “Company”) and CD&R VFC Holdings, L.P., a Cayman Islands exempted limited partnership (“CD&R Holdings” and, together with its Affiliates, the “CD&R Investors”). Capitalized terms used and not otherwise defined herein shall have the meanings given to such terms in the Investment Agreement.

Prior to the date hereof, the Board of Directors of the Company (the “Board”) established a transaction committee (the “Transaction Committee”) for the purpose of, among other things, considering whether it would be appropriate for the Company to consider a potential transaction in which a third party, including one or more of the CD&R Investors, would acquire all of the outstanding shares of Common Stock of the Company (a “Potential Transaction”). Acting upon the unanimous recommendation of the Transaction Committee, the Company hereby waives, and shall not enforce, the obligations of CD&R Holdings and its Affiliates pursuant to Section 5.07 of the Investment Agreement as and solely to the extent necessary to permit one or more of the CD&R Investors, together with TPG Global, LLC and its Affiliates, to (i) make a proposal to the Company (which shall be directed to the Transaction Committee) for a Potential Transaction (the “Proposal”); (ii) publicly disclose that one or more of the CD&R Investors has made the Proposal to the Company, along with the CD&R Investors’ intention to seek to engage in the Potential Transaction referenced in the Proposal, by filing amendments to the statements on Schedules 13D and 13D/A previously filed by the CD&R Investors, as applicable, in compliance with the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (provided that the CD&R Investors shall provide the Company with a reasonable opportunity to review and comment on drafts of such amendments and shall consider in good faith all comments reasonably proposed by the Company in connection therewith), and (iii) to further engage with the Company (through the Transaction Committee, unless otherwise directed) to pursue, develop and, if later approved by the Board upon the recommendation of the Transaction Committee, enter into the Potential Transaction, including negotiating the terms thereof, conducting due diligence, obtaining financing and engaging in other reasonably necessary activities customarily associated with the negotiation of a consensual transaction in the nature of the Potential Transaction (the “Limited Waiver”). It is explicitly understood and agreed that the Limited Waiver may be revoked at any time in the Company’s sole discretion (acting through the Transaction Committee, unless the Transaction Committee otherwise determines) prior to the execution of a definitive transaction agreement between the Company and one or more of the CD&R Investors with respect to the Potential Transaction (a “Definitive Agreement”) or in the event the parties determine to cease discussions relating to the Proposed Transaction; provided that, if a Definitive Agreement is terminated for any reason, the right of the Company (acting through the Transaction Committee, unless the Transaction Committee otherwise determines) to revoke the Limited Waiver shall be restored in all respects, it being understood that no such revocation shall retroactively invalidate any statement or action of any CD&R Investor made or taken during the period during which the Limited Waiver was in effect so long as such statement or action was not, at the time made or taken, in breach of the Limited Waiver. The Limited Waiver is in full reservation of, and without any waiver of or agreement not to enforce, all other rights and obligations in the Investment Agreement, which remains in full force and effect in all other respects.

This letter agreement may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. The exchange of a fully executed letter agreement (in counterparts or otherwise) by electronic transmission in .PDF format or by facsimile shall be sufficient to bind the parties to the terms and conditions of this letter agreement. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof. For purposes of this letter agreement, the term “affiliate” shall be as such term is defined under the Exchange Act and the term “person” shall be broadly interpreted to include any corporation, partnership, group, governmental body, individual or other entity.

[Signature Pages Follow]

Limited Waiver

ACKNOWLEDGED AND AGREED
AS OF THE DATE FIRST SET
FORTH ABOVE BY:
CD&R VFC HOLDINGS, L.P.
By: CD&R Investment Associates IX, Ltd., its general partner
/s/ Rima Simson
By:		Rima Simson
Title:		Vice President, Treasurer and Secretary
Cc:
Debevoise & Plimpton LLP 919 Third Avenue
New York, NY 10022
Attention: Paul S. Bird
Email:      psbird@debevoise.com

Limited Waiver

EXHIBIT 99.10

JOINT FILING AGREEMENT

Pursuant to Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned agree that the Statement on Schedule 13D to which this exhibit is attached is filed on behalf of each of them in the capacities set forth below.

Dated: May 20, 2022

 

 

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