Shares of Synchrony Financial (SYF) jumped after the consumer finance company announced that it is selling its Pets Best Insurance Services subsidiary to Poodle Holdings.
The company said in a regulatory filing that it will receive a combination of cash and an equity interest in Poodle Holdings’ affiliate, Independence Pet Holdings, in exchange for the pet insurance unit.1
Synchrony said the agreement will result in an estimated after-tax gain of $750 million. The company noted that the total is subject to change “based on the carrying value of Pets Best’s net assets and the final valuation of the consideration to be received at closing.”1
Synchrony acquired Pets Best in March 2019 and brought it under its CareCredit umbrella, saying the move would allow CareCredit to “offer a comprehensive suite of payment options for veterinarians and pet owners to help pets access the care they need.”2
At the time, then-CareCredit CEO Beto Casellas said that more people were “embracing pets as part of their family” and that the addition of Pets Best would give the company “unique insight into the fast-growing pet health insurance market.”2
The transaction is expected to close in the first quarter of next year.1
Despite Tuesday’s 5% gain, shares of Synchrony Financial are in negative territory for the year.
