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BOCA RATON, Fla., Sept. 30, 2019 (GLOBE NEWSWIRE) -- Saxena White P.A. has filed a securities fraud class action lawsuit in the United States District Court for the Eastern District of New York against Covetrus, Inc. (“Covetrus” or the “Company”) (NASDAQ: CVET), certain of its executive officers, and Henry Schein Inc. (“Henry Schein”) (collectively, “Defendants”) on behalf of all persons or entities who purchased or otherwise acquired Covetrus common stock between February 8, 2019 and August 12, 2019, inclusive (the “Class Period”).
If you purchased Covetrus common stock during the Class Period and wish to apply to be lead plaintiff, a motion on your behalf must be filed with the Court by no later than November 29, 2019. You may contact David Kaplan (firstname.lastname@example.org), an attorney and Director at Saxena White P.A., to discuss your rights regarding the appointment of lead plaintiff or your interest in the class action. You may also retain counsel of your choice and need not take any action at this time to be a class member.
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.”
In the offering documents for the spin-merger and 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.
On August 13, 2019, before the market opened, Covetrus shocked investors by reporting a net loss of $0.09 per share for the second quarter of 2019 compared to consensus analyst estimates of $0.17 in net income per share. Covetrus also slashed its 2019 EBITDA guidance to just $200 million, down substantially from its prior EBITDA guidance of approximately $250 million issued in February and May 2019, only a few months prior. In doing so, Covetrus admitted that the Company would have to spend tens of millions of dollars more in infrastructure spending and redundant costs. The Company also admitted previously undisclosed difficulties integrating the 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, the Company’s stock price plummeted 40%, declining $9.30 per share, to close at $13.89 per share on August 13, 2019.
The Complaint asserts claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against Covetrus, Henry Schein and certain of Covetrus’ senior executives. The action alleges that during the Class Period, Defendants issued a series of false and/or misleading statements and failed to disclose material adverse facts about Covetrus’ business, operations, and prospects. 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 the Company’s separation from Henry Schein.
You may obtain a copy of the Complaint and inquire about actively joining the class action at www.saxenawhite.com.
Saxena White P.A., with offices in Florida, New York, and California, concentrates its practice on prosecuting securities fraud and complex class actions on behalf of institutions and individuals. Currently serving as lead counsel in numerous securities fraud class actions nationwide, the firm has recovered hundreds of millions of dollars on behalf of injured investors and is active in major litigation pending in federal and state courts throughout the United States.