PHILADELPHIA — Petplan, a pet health insurance provider, has been acquired by Warburg Pincus, a global private equity firm focused on growth investing.
Financial terms of the transaction were not disclosed.
Petplan, headquartered in Newtown Square, PA, provides pet health insurance to over 200,000 customers in the U.S. and Canada.
“This investment is a game changer for Petplan. It enables us to catapult the product innovation and customer experience that our company was founded upon and introduce the very best pet health insurance to millions of pet parents in North America,” said Paul Guyardo, CEO of Petplan. “We’re thrilled to be working with Warburg Pincus and the multitude of resources the firm provides.”
The Philadelphia Inquirer notes that the acquisition “paves the way for the departure of [Petplan’s] founders — Christopher and Natasha Ashton — and the investor group led by Moorestown banker Vernon Hill.”
The Ashtons and Hill had been in a battle for control of the company. With the acquisition, they’ve now settled two lawsuits that had been pending.
Jeff Stein, managing director of Warburg Pincus, said, “As a long-term investor in the insurance sector, we see incredible potential in Petplan given its leading position in an underpenetrated and growing market. We are excited to partner with Paul and his management team to help drive the Company’s next phase of growth.”
The company has 200 employees and annual sales of $130 million, according to the Inquirer.
As part of the acquisition, John Giannuzzi will join as chairman of the board for Petplan. Giannuzzi is the co-founder and managing general partner of Sherbrooke Capital, a growth capital private equity firm focused on investing in emerging consumer companies.
According to the American Pet Products Association, Americans will spend more than $18 billion on vet care this year alone. Rising healthcare costs, combined with an increased awareness of pet insurance, has created significant market potential. With sixty-seven percent of U.S. households owning a pet, only 2% of these pets are insured, compared to the 25%-30% pet insurance levels found across Europe.
Warburg Pincus has invested over $13 billion across the financial services landscape, including insurance, banking, asset management, specialty finance, payment and transaction processing. Investments in insurance include, Foundation Risk Partners, SCM Insurance, McGill & Partners, Arch Capital, RenaissanceRe and Aeolus Re.