According to a statement released Monday, JAB, which owns Keurig Dr Pepper Inc. and Krispy Kreme Inc., will pay approximately $1.4 billion for Fairfax's stakes in Crum & Forster Pet Insurance Group and PetHealth Inc.
Fairfax, Prem Watsa's Canadian investment firm, plans to invest $200 million in JAB's latest consumer fund as part of the deal, according to the statement, which confirms an earlier Bloomberg News report.
The transaction is expected to close in the second half of 2022, subject to regulatory approvals. According to the statement, Fairfax will receive $1.15 billion in cash and $250 million in seller notes from the transaction.
C&F Pet and PetHealth both provide insurance plans to pet owners as well as services to animal-welfare shelters and adoption centers under various brands. JAB already owns the majority of Independence Pet Group and has expanded the platform through acquisitions such as Figo and Cardif Pinnacle. The investment firm hired four executives in November to lead its expanding pet insurance business.
Businesses that assist people in caring for their pets have experienced a surge as pet ownership increased during the Covid pandemic. According to the American Pet Products Association, approximately 70% of US households will own a pet in 2021 and 2022, up from 67 percent in 2019.
Buyers and sellers alike are taking advantage of what is perceived to be a recession-proof investment. According to Bloomberg News, Champion Petfoods is considering various options, including a possible sale that could value the company at more than $2 billion.