Private equity firm CVC Capital Partners has made a $1.1 billion buyout offer, in cash and shares, to Nirvana Asia Ltd (1438.HK), Asia’s largest funeral services firm, betting on rising ranks of the wealthy in the region increasing demand for luxury funerals.
As part of the deal, CVC is offering HK$3 per share in cash, a premium of 22.4 percent over its last trading price, to the company founder and other shareholders of Nirvana, the two firms said in separate announcements.
CVC is making a buyout offer in cash and shares to founder Rightitan, which owns 42.7 percent of the company, and Orchid Asia Group Management, which holds a 21.6 percent stake. For others, the buyout offer will be in cash.
Nirvana provides burial plots, niches and tomb design and construction services in markets including Malaysia, Thailand, Singapore and Indonesia. Its profit rose 2 percent in 2015 from a year ago to about $45 million, according to its website.
With a growing number of the rich in Asia making the passage to the afterlife with the best that money can buy, companies like Nirvana provide services that range from $100,000 gold-plated caskets to million-dollar burial plots.
The shares of Nirvana, which made its market debut in Hong Kong in 2014, will be delisted after completion of the buyout offer, the statements said. The company shares have in the past traded below its IPO price of HK$3 per share.
“The proposal provides the shareholders with an opportunity to realize their investment in the company for cash during current uncertain market conditions,” Nirvana said in an exchange filing. “Global markets are subject to further potential uncertainties in the face of certain recent political and economic events including the Brexit.”
JPMorgan (JPM.N) advised CVC on the deal, while Nirvana was advised by UBS (UBSG.S), the statements said.
Photo: A paper butterfly is displayed on a coffin during Asia Funeral Expo (AFE) in Hong Kong May 19, 2011. Reuters/Bobby Yip