Clayton Dubilier & Rice and TPG are in discussions with private credit firms, including Blue Owl Capital, to raise at least $2.5bn of debt to refinance portfolio company Covetrus, according to a report by Bloomberg citing people familiar with the matter.
The proposed financing would be used to refinance approximately $2bn of existing debt and support a potential add-on acquisition. The sponsors are also considering an additional equity injection as part of the transaction, which remains under discussion. Pricing is expected to be at least five percentage points over the benchmark rate, though terms are not final.
CD&R and TPG acquired Covetrus in 2022 in a take-private deal valuing the veterinary technology provider at around $4bn. The company offers software and services to veterinary practices, including online pharmacy and payment processing platforms.
Covetrus originally raised a $1.53bn first-lien leveraged loan and a $350m second-lien loan to fund the acquisition. Blue Owl holds an investment in the second-lien facility, which according to regulatory filings was priced at 9.25 percentage points over the benchmark rate.
