The Complaint brings forth claims for violations of the Securities Exchange Act of 1934 against Covetrus (the “Company”), and certain of its senior executives. The Complaint alleges that Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects on behalf of all persons or entities that purchased or otherwise acquired Covetrus common stock during the Class Period.
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, to create what the Company described to investors as the “only global animal health technology and services company.” Henry Schein announced the spin-merger on April 23, 2018. The Company began trading on the NASDAQ Global Market on February 8, 2019.
Specifically, the Complaint alleges that, throughout the Class Period, Defendants made a series of false and misleading statements and omissions concerning the newly combined companies’ infrastructure and capabilities, as well as the true costs of becoming independent from Henry Schein. After the merger, Defendants assured investors that the integration of the legacy Henry Schein Animal Health Business and VFC was “on track” to hit financial targets. Then, on August 13, 2019, before the market opened, Covetrus shocked investors by reporting a net loss for the second quarter of 2019, and slashed its 2019 EBITDA guidance by as much as $250 million, among other things, causing the Company’s stock price to plummet 40%, declining $9.30 per share, from $23.19 per share on August 12, 2019, to close at $13.89 per share on August 13, 2019.
On December 23, 2019, the Court appointed the City of Hollywood Police Officers’ Retirement System and the Pembroke Pines Pension Fund for Firefighters and Police Officers (collectively, the “Pension Funds”) as Lead Plaintiff and approved Saxena White as Lead Counsel.