Covetrus Inc. Class Action Lawsuit
- Company Name
- Covetrus Inc.
- Stock Symbol
- Class Period
- February 8, 2019 to August 12, 2019
- Motion Deadline
- November 29, 2019
- Eastern District of New York
On September 30, 2019, the Covetrus, Inc. class action lawsuit was filed charging Covetrus, certain of its officers, and Henry Schein, Inc. with violations of the Securities Exchange Act of 1934. The Covetrus class action lawsuit was commenced in the Eastern District of New York on behalf of purchasers of Covetrus common stock between February 8, 2019 and August 12, 2019 (the “Class Period”) and is captioned City of Hollywood Police Officers Retirement System v. Henry Schein, Inc., No. 2:19-cv-05530.
Covetrus purports to be a global technology-enabled animal health business that offers a comprehensive service and technology platform and supply chain infrastructure to the veterinary markets. Covetrus was formed through a spin-off and merger of the Animal Health Business of Henry Schein with Vets First Choice (“VFC”), a privately held company (the “spin-off”). Henry Schein announced the spin-off in April 2018 and Covetrus shares began trading on the NASDAQ on February 8, 2019.
The Covetrus class action lawsuit alleges that in the offering documents for the spin-off and throughout the Class Period, defendants made a series of false and misleading statements and/or omissions concerning the newly combined companies’ infrastructure and capabilities, as well as the true costs of Covetrus becoming independent from Henry Schein. Specifically, defendants’ representations to investors: (i) overstated Covetrus’ capabilities with regard to inventory management and supply chain services; (ii) understated the costs of the integration of Henry Schein’s Animal Health Business and VFC, including the timing and nature of those costs; (iii) understated Covetrus’ separation costs from Henry Schein; and (iv) understated the impact on earnings from online competition and alternative distribution channels, as well as the impact of the loss of a large customer in North America just prior to Covetrus’ separation from Henry Schein. As a result of defendants’ false statements and/or omissions, the price of Covetrus common stock was artificially inflated to more than $40 per share during the Class Period.
Then on August 13, 2019, before the market opened, Covetrus reported disappointing financial results for the second quarter of 2019, including a net loss of $0.09 per share compared to consensus analyst estimates of net income of $0.17 per share. Covetrus also slashed its 2019 EBITDA guidance to $200 million, down substantially from its prior EBITDA guidance of approximately $250 million issued in February and May 2019, only a few months earlier. In doing so, Covetrus admitted that Covetrus would have to spend tens of millions of dollars more in infrastructure spending and redundant costs. Covetrus also admitted previously undisclosed difficulties integrating the companies’ platforms and disclosed increased spending to eliminate obligations to Henry Schein as part of the spin-off agreement. In response to these and other disclosures, Covetrus’ stock price plummeted 40%, falling $9.30 per share to close at $13.89 per share on August 13, 2019.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Covetrus common stock during the Class Period to seek appointment as lead plaintiff in the Covetrus class action lawsuit. A lead plaintiff will act on behalf of all other class members in directing the Covetrus class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Covetrus class action lawsuit. An investor’s ability to share in any potential future recovery of the Covetrus class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the Covetrus class action lawsuit or have questions concerning your rights regarding the Covetrus class action lawsuit, please provide your information here or contact counsel, Brian E. Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. Lead plaintiff motions for the Covetrus class action lawsuit must be filed with the court no later than November 29, 2019.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For six consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.