JAB Holding Company (JAB) has entered into an agreement to acquire all of Fairfax’s interests in US-based Crum & Forster Pet Insurance Group, in a deal worth $1.4bn.
The transaction will see Fairfax, a financial holding company engaged in the provision of property and casualty insurance, receive $1.4bn in the form of $1.15bn cash and $250m in seller notes.
Fairfax will also make a $200m investment in JAB latest consumer fund JCP V.
As a result of the deal, JAB’s combined global pet insurance and ecosystem platform will be estimated to have written premiums and pet health services revenues of over $1.2bn by 2023, insuring more than 1.2 million pets.
A report by the Financial Times noted that the investment comes a week after regulators at the US Federal Trade Commission raised its concerns over the European private equity firm’s growing influence in the US veterinary market. The commission intervened in JAB Consumer Partners’ acquisition of SAGE Veterinary Partners, to prevent it from forming local monopolies.
Indeed, JAB began acquiring US Veterinary clinics in 2019 as it expands its footprint in the booming US pet care and insurance industry.
The pandemic saw a rise in pet ownership in both the US and Europe, which has subsequently increased the demand for pet insurance. The sector has seen strong funding in recent months. Pawlicy Advisory recently raised $12m in Series B funding, Paris-based pet insurer Dalma raised €15m in Series A funding, and Swedish pet insurer Lassie secured €11m in a Series A round.
Prem Watsa, founder, chairman and CEO of Fairfax, said of the transaction, “Fairfax is very happy to partner with Olivier Goudet and JAB Holding Company. JAB has had an outstanding track record over the past 10 years and we expect this to continue. While we have sold our pet insurance business to JAB, we will invest $200m in their JCP V to become their partners. We expect JAB to soon become leaders in pet healthcare and pet insurance globally.”
Dirk Beeckman, CEO of JAB’s pet insurance portfolio, added, “[The] transaction is a major milestone for us in our mission to become a global leader in pet insurance and the pet health ecosystem.
“It also significantly advances our mission of providing the leading health and wellbeing ecosystem for pets through the offering of affordable, comprehensive pet products and brands throughout a pet’s lifecycle. C&F Pet‘s long history of disciplined omni-channel underwriting fits perfectly with our culture, and we look forward to working with the team.”
The transaction is subject to customary closing conditions, including various regulatory approvals, and is expected to close in the second half of 2022.
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