JAB Holding Company and Fairfax Financial Holdings Limited have announced that JAB’s pet insurance business agreed to acquire all of Fairfax’s interests in the Crum & Forster Pet Insurance Group Pethealth Inc., including all of their worldwide operations.

Fairfax will receive $1.4 billion in the form of $1.15 billion cash and $250 million in seller notes. JAB said its combined global pet insurance and ecosystem platform will grow to have gross written premiums and pet health services revenues of well over $1.2 billion by 2023, insuring more than 2.1 million pets. The transaction, subject to conditions and regulatory approvals, is expected to close in the second half of 2022.

C&F Pet today insures over 500,000 pets and markets or serves as underwriter for numerous brands, including ASPCA Pet Health Insurance, 24Petprotect, Hartville Pet Insurance, Spot Insurance Services, Pumpkin Insurance Services and PetCoach LLC (provider of Petco pet insurance plans) in the United States and Pets Plus Us in Canada.

Pethealth provides well-being and safety solutions to shelters and pet parents under the 24Pet brand, which includes the 24Petwatch Registry with over 20 million registered pets.

As part of the transaction, Fairfax will also make a $200 million investment in JCP V, JAB’s latest consumer fund.

“Fairfax is very happy to partner with Olivier Goudet (managing partner and CEO of JAB) and JAB Holding Company,” said Prem Watsa, the founder, chairman and CEO of Fairfax. “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 $200 million in their JCP V to become their partners. We expect JAB to soon become leaders in pet healthcare and pet insurance globally. We wish them much success.”

The pet insurance industry, which has been expanding at a rate of approximately 20 percent per year on a global basis, is expected to continue to see many years of steady, strong growth driven by attractive long-term trends in pet care and significant opportunities to expand penetration, especially in the U.S. and Canadian markets, which have less than 3 percent penetration, said JAB, which already had a controlling stake in NVA, one of the world’s largest animal care services platforms, and Independence Pet Group, a leading provider of pet insurance. Last October JAB acquired Chicago-based pet insurance provider Figo and a majority stake in UK pet insurer Cardif Pinnacle.

JAB Holding Company, a German conglomerate based in Luxembourg, and its JAB Consumer Partners is also the largest shareholder of Keurig Dr Pepper and has controlling stakes in coffee company JDE Peet’s, Krispy Kreme Doughnut, Panera Brands, Pret a Manger and Espresso House.

“We are extremely excited to partner with Prem and his organization on this transformational transaction and to welcome them as a partner in our fund,” said Goudet. “Prem has an incredible multi-decade track record of building great businesses and compounding returns, and we look forward to accelerating the growth of their pet insurance business as part of our focused pure-play pet insurance platform.”

Dirk Beeckman, CEO of JAB’s pet insurance portfolio, added: “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 well-being ecosystem for pets through the offering of affordable, comprehensive pet products and brands throughout a pet’s life cycle. 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.”