Fairfax Financial Holdings has agreed to offload its two animal insurance companies to JAB Holding in a deal worth $1.4bn.
As per the agreement, Fairfax will sell its holdings in Crum & Forster Pet Insurance Group (C&F Pet) and Pethealth, including all of their global operations, to JAB’s pet insurance business.
JAB will pay $1.15bn in cash and $250m in seller notes for the transaction.
This deal also includes a $200m investment by Fairfax in JAB’s latest consumer fund, JCP V.
Currently, C&F Pet insures more than 500,000 pets. It markets or serves as underwriter for several brands, including 24Petprotect, Hartville Pet Insurance, among others in the US and Pets Plus Us in Canada.
Pethealth, through a number of wholly owned subsidiaries, offers a range of products and services for shelters, veterinarians and pet owners.
JAB pet insurance portfolio CEO Dirk Beeckman said: “Today’s 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.”
JAB’s integrated global pet insurance platform is projected to have gross written premiums and pet health services revenues of more than $1.2bn by 2023. It will offer cover for over 2.1 million pets.
Planned to be closed in the second half of this year, the deal awaits regulatory clearance.
Fairfax founder, chairman and CEO Prem Watsa said: “While we have sold our pet insurance business to JAB, we will invest $200 million in their JCP V to become their partners. We expect JAB to soon become leaders in pet healthcare and pet insurance globally.”