Dive Brief:
- Private label card issuer Synchrony Financial said Monday it’s selling its Pets Best Insurance Services subsidiary to Poodle Holdings for a gain of $750 million.
- Stamford, Connecticut-based Synchrony on Nov. 23 agreed to sell the pet health insurance business for a combination of cash and an equity interest in Poodle Holdings affiliate Independence Pet Holdings, according to a Monday filing with the Securities and Exchange Commission. The sale is expected to close in the first quarter of 2024, the filing said.
- Synchrony will keep a foothold in the pet industry through the IPH ownership stake and gain new options for offering credit to pet owners, a Synchrony spokesperson said in a Monday email, lauding the new “partnership to help achieve long-term growth for Synchrony, Pets Best, and IPH.”
Dive Insight:
Synchrony acquired Pets Best in 2019, saying the purchase would aid it in expanding its health and wellness credit card CareCredit into the pet market.
At that time, Synchrony said the acquisition built on CareCredit’s presence in the veterinary market by offering “an immediate entry point into the rapidly growing pet insurance market,” according to a news release.
The Synchrony spokesperson declined to comment on how much the company paid for Pets Best in 2019, or the cash amount Synchrony gets from the deal with Raleigh, North Carolina-based Independence Pet Holdings.
In the filing, Synchrony said the gain on the sale took taxes into account and could change based on “the carrying amount of net assets of Pets Best and the final valuation of consideration to be received at closing.”
In the human healthcare market, CareCredit is one of the top companies offering medical credit cards, according to a May report from the Consumer Financial Protection Bureau. The number of CareCredit cardholders nearly tripled over a decade, from 4.4 million in 2013 to 11.7 million cardholders this year, the CFPB’s report said.
In July, the CFPB, Department of Health and Human Services and the Treasury Department launched an inquiry into medical credit cards and installment loans as part of a broader effort by the federal government to get healthcare costs under control.
Third-party medical credit cards “often include teaser rates and deferred interest features that lead to higher costs for consumers,” said Neera Tanden, the White House domestic policy adviser, during a July conference call announcing that inquiry.
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