Covetrus cut to market perform at Raymond James on buyout offer

May 23, 2022 12:42 PM ETCovetrus, Inc. (CVET)By: Jonathan Block, SA News Editor

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  • Raymond James had downgraded Covetrus (NASDAQ:CVET) to market perform from outperform citing the $21/share buyout offer from Clayton, Dubilier & Rice.
  • Analyst Elliot Wilbur said that while the offer premium is a relatively modest 17%, shares are up ~27% since May 11.
  • While bolt-on acquisitions are possible, he noted that Covetrus' (CVET) debt load and light cash flow are a hindrance.
  • "The proposed $21 purchase price values CVET at an enterprise value (diluted) of approximately $3.87B, or 14.1x  our and consensus adjusted EBITDA estimates," he wrote.
  • Other analysts have weighed in on the buyout offer.

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