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Direct lenders look to cap securitizations post First Brands. Private credit lenders are increasingly negotiating securitization limits into credit agreements to guard against the kind of runaway off-balance sheet financings that led to the bankruptcies of First Brands and Tricolor, according to 9fin sources. One such provision recently cleared the market in the $3.5bn refinancing that direct lenders arranged for veterinary technology platform Covetrus, sources said. When the company and its sponsor, CD&R, turned to private credit lenders led by Blue Owl to refinance its syndicated debt and upsize its facility to fund its acquisition of MWI Health, lenders took the opportunity to introduce protections that cap the amount a business can raise through accounts receivable factoring or securitization, sources said. Ultimately, such a clause would limit a borrower's ability to raise some forms off-balance-sheet financing that went largely undetected and led to the demise of companies like First Brands. Blue Owl and Covetrus declined to comment. CD&R did not respond to requests for comment. Covetrus is among a growing number of private credit-backed deals with these types of guardrails, sources told 9fin, noting that lenders in the broadly syndicated loan market are also pushing to include similar provisions in their credit documents. Read all our public content for free. You may unsubscribe from these communications at any time. Discover more insights. Use the previous and next buttons or keyboard arrows to navigate between slides.

Covetrus and MWI Animal Health plan to merge. Covetrus and MWI Animal Health plan to merge Deal would mark a significant consolidation of distributors of veterinary products Published: February 19, 2026 By Lisa Wogan Series See related stories " Covetrus_HQ VIN News Service 2023 photo Covetrus is headquartered in Portland, Maine. Covetrus has agreed to acquire MWI Animal Health in a move that will reduce to two the number of nationwide distributors of veterinary pharmaceuticals, equipment and supplies in the United States. MWI is being sold by its parent company, Cencora, for $1.25 billion in cash, plus shares that will give it a 34.3% stake in the combined company. In an announcement Wednesday, Covetrus said merging the companies will result in expanded and improved services that benefit veterinarians and their patients by making care more affordable and accessible. But some of their customers immediately raised concerns that the merger may have negative consequences because of reduced competition. Covetrus is an international company that distributes products and sells practice management software and online pharmacy services to veterinarians. The Portland, Maine-based company was created from a merger of Henry Schein Animal Health and Vets First Choice in early 2019. After a three-year stint as a public company, Covetrus was taken private by a pair of private equity firms in 2022. Based in Boise, Idaho, MWI was founded more than 50 years ago by a veterinarian to serve nearby colleagues and grew into a major veterinary distributor. It was purchased for $2.5 billion in 2015 by an international pharmaceutical company, AmerisourceBergen Corp, now named Cencora. Covetrus CEO Ben Wolin said the merger would allow the combined company to improve its logistics capabilities, "create savings" and invest in innovation. "This combination is about making animal healthcare more affordable and accessible, and we remain committed to driving innovation across the industry," he said in a press release. Cencora indicated that it would prefer to focus on other parts of its business, which include drug distribution and research in the human health care realm. "This transaction positions MWI for success with a partner strategically focused on and dedicated to animal health, while allowing Cencora to further invest in our key growth priorities," Cencora CEO Bob Mauch said. The only other major U.S. veterinary distributor is Patterson Companies. Formerly a public company, Patterson was purchased and taken private last year by Patient Square Capital, a health care investment firm. In brief * Covetrus announced plans to acquire MWI Animal Health. * The merger will reduce to two the number of nationwide distributors of veterinary pharmaceuticals, equipment and supplies. * Covetrus said the deal will make veterinary care more affordable and accessible. * The news immediately drew criticism that the merger would be unhealthy for the veterinary profession. The next largest veterinary distributor is Midwest Veterinary Supply, a family- and employee-owned company in Minnesota. There are also a handful of regional and specialized veterinary distributors. Seventeen years ago, the veterinary distribution landscape was notably different. There were six companies with national reach, according to a tally in 2009 by the executive director of the American Veterinary Distributors Association. At that time, consolidation was well underway; the association had lost 11 distributor members in seven years. To stay viable, the group later recast itself as the United Veterinary Services Association, with a membership encompassing manufacturers, suppliers and nonprofit organizations as well as distributors. Covetrus' move on MWI may draw the attention of the Federal Trade Commission, which reviews mergers and acquisitions that could substantially reduce competition. Cencora has said it expects the transaction to close after Sept. 30. The announcement does not address the future status of MWI employees. Immediate concerns voiced On the day of the announcement, James Rericha published an open letter on LinkedIn urging Cencora to spin off MWI as a standalone company rather than sell it to Covetrus. Rericha and his wife, Dr. Katie Rericha, own eight veterinary clinics in Missouri. He also urged federal regulators to listen to veterinarians' concerns when they evaluate the deal. Rericha told the VIN News Service that he is a customer of both MWI and Covetrus. He believes MWI can be a strong company on its own, to the benefit of the profession. In his letter, he describes the merger as harmful to practices like his. Merging MWI's "distribution muscle" with Covetrus' technology and services platform "creates a vertically integrated giant that controls the supply chain, the software, and the data," he writes. "For independent practices, that concentration of power raises real questions about pricing leverage, vendor lock-in, and whether the combined entity will prioritize its own platform over open interoperability." Open interoperability is the ability of systems, devices and software from different vendors to work together and easily exchange data. In contrast to a merged company, Rericha writes, "an independent MWI would have every incentive to earn customer loyalty through better service, open integrations, and competitive pricing - because it would have to." Responding to Rericha's letter, Wes Hentges, founder of Missouri-based ProPartners, a business and financial management company for veterinary clinic owners, agreed that the merger is worrisome. "On the surface, the companies say it will help vets with access and efficiency," he wrote, "but in reality, it reduces competition and puts more pricing and platform power into fewer hands. When distribution, software, and services are wrapped together, independent clinics lose leverage and choice." Hentges compared the concerns to those raised during the proposed merger of the grocery giants Kroger and Albertsons. Federal regulators blocked the merger on the basis that it would reduce competition and likely increase prices. "That same dynamic, fewer big players with more control, can hurt customers even if the companies say otherwise," Hentges wrote. A Covetrus spokesperson declined today to comment on the concerns. VIN News Service commentaries are opinion pieces presenting insights, personal experiences and/or perspectives on topical issues by members of the veterinary community. To submit a commentary for consideration, email [email protected]. Information and opinions expressed in letters to the editor are those of the author and are independent of the VIN News Service. Letters may be edited for style. We do not verify their content for accuracy.