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Warburg Prevails in Petplan Auction

By Steve Gelsi

Warburg Pincus LLC won a competitive sales process conducted without an investment banker for pet insurance provider Petplan, a source familiar with the transaction told The Deal.

Less than a year after Petplan CEO Paul Guyardo joined the company after working as chief commercial officer of Discovery Communications Inc., he ran the auction for the Newtown Square, Pa.-based company, the source said. The company operates under the name Fetch Insurance Services LLC in Michigan and Petplan Insurance Agency LLC in California.

The deal, announced Wednesday, Oct. 2, resolves legal disputes between Vernon Hill, an owner of PetPlan, and the founders of the company, Chris and Natasha Ashton. Hill is founder of Commerce Bancorp, which was acquired by Toronto-Dominion Bank in 2007 and combined with TD Banknorth to form TD Bank N.A . He is also chairman of Republic First Bancorp Inc.; chairman and founder of  Metro Bank PLC and chairman and founder of Hill Townsend Capital LLC, according to BoardEx. Hill

The Ashtons and Hill settled legal actions stemming from their termination from the company in 2018, the source said. Billionaire hedge fund manager Steven A. Cohen, was another Petplan shareholder.

The couple filed a wrongful termination suit in Philadelphia Common Pleas Court. A separate legal action in Delaware Chancery Court had also clouded the fate of the company.

Warburg said it will provide “significant capital” and resources to drive growth at Petplan, which now reportedly has about 200 employees and annual sales of $130 million. Warburg managing director Jeffrey Stein led the deal for the New York firm.

As part of the deal, John Giannuzzi will join Petplan as chairman of the board. Giannuzzi is co-founder and managing general partner of Sherbrooke Capital, a growth capital private equity firm based in Newton Lower Falls, Mass.

Petplan has grown subscriptions to its pet insurance plans by 15% to more than 200,000 in the past year, Petplan said.

Fetch Insurance Services and Petplan Insurance administers the parents’ insurance policies, which are underwritten by AXA SA subsidiary XL Specialty Insurance Co.

Cozen O’Connor served as legal adviser for Petplan. Ira Gubernick led the deal for the firm.

Mark Veblen led the deal for Wachetll, Lipton, Rosen & Katz LLP, the legal adviser for Warburg Pincus.

For its part, Warburg Pincus manages about $84 million and raised $11.2 billion in 2018 for Warburg Pincus Private Equity XI, L.P., its flagship investing pool.