Pethealth, based in Oakville, Ontario, Canada, will pay up to $800,000 for the PurinaCare policies. The transaction is expected to close May 1.
The sale makes financial sense for PurinaCare and parent company Nestlé Purina PetCare, spokeswoman Jill Winte said.
“It's a business decision based on economics and months of careful analysis,” she said.
PurinaCare policies will be honored until renewal time, Winte said. Policyholders will be allowed to transition to a similar Pethealth policy if they choose, she added.
PurinaCare, which wrote its first policy in 2008, employs about two dozen people, most of them in San Antonio. Some employees may be able to transfer to Nestlé Purina's Partners in Wellness program, Winte said.
Partners in Wellness helps veterinary practitioners create customized preventive-care plans. Idexx Laboratories Inc. of Westbrook, Maine, is a program partner, providing consultants to develop diagnostic protocols and practice work flow for practices. Nestlé Purina handles client billing and administrative tasks.
About 1 million pets are insured in North America, according to the North American Pet Health Insurance Association.
Among the largest providers are VPI Pet Insurance of Brea, Calif., with about 400,000 policyholders, and Pethealth, with about 200,000. Pets Best Insurance of Boise, Idaho, has 100,000.
PurinaCare's sale did not surprise Jack L. Stephens, DVM, the founder and president of Pets Best.
“I've known about it for four or five months,” Dr. Stephens said. “I heard the rumor. I knew it was coming down.”
Pets Best considered bidding on PurinaCare, Stephens said.
“Several of us tried to,” he said, “but it seemed a done deal.”
PurinaCare's disappearance will be a blip on the pet health insurance screen, Stephens added.
“The transaction will not have a negative impact to the industry,” he said.