Park Lawn closes $123 mln buy of JMH’s Signature Group

Park Lawn Corp (TSX: PLC) has closed its acquisition of Signature Funeral and Cemetery Investments LLC, a Houston-based funeral and cemetery company, for about US$123 million in cash. PLC, a Toronto-based deathcare services provider, said the deal adds 9 cemeteries, 21 funeral homes and 5 crematoria across the United States to its portfolio. Signature Group’s Brad Green, PLC’s incoming president, said he is expecting further growth opportunities “both internally through integration and externally through acquisitions.” Founded in 2011, Signature Group was acquired in 2013 by U.S. private equity firm JMH Capital Partners.


Park Lawn Corporation Completes Acquisition of Signature Group

Acquisition significantly expands PLC cemetery and funeral home operations in the US

TORONTO, May 7, 2018 /CNW/ – Park Lawn Corporation (TSX: PLC) (“PLC” or the “Company”) is pleased to announce that it has completed the previously announced acquisition of all the outstanding membership interests of Signature Funeral and Cemetery Investments, LLC (“Signature” or “Signature Group”) for a purchase price of approximately US$123 million in cash, subject to customary working capital adjustments (the “Acquisition”).

“With the acquisition of Signature Group, we now have the team in place to build a consolidated and integrated US business platform,” said Andrew Clark, Chairman and CEO of PLC. “Our focus over the next period of time will be on building the strongest possible operational and sales organization to continue enhancing the company’s growth profile.”

“Our entire organization is very excited to be a part of Park Lawn. There are many growth opportunities, both internally through integration and externally through acquisitions”, said Brad Green, incoming President of PLC. “Integrating all the recent acquisitions and creating a unified team will be a priority. With this management team, we have a competitive edge that we will quickly use to build the leading funeral and cemetery business in North America” added Jay Dodds, incoming COO of PLC.

Highlights of the Acquisition

Adds four new states, Kansas, Missouri, New Mexico and Mississippi into PLC’s portfolio, while expanding its footprint in the Texas market. The Acquisition will add 9 cemeteries, 21 funeral homes (including 7 located on cemetery sites) and 5 crematoria to PLC’s portfolio.

Signature Group’s Brad Green and Jay Dodds will be taking on senior leadership positions within PLC as President and Chief Operating Officer respectively, with a particular focus on integrating U.S. operations into a centralized platform

In the first full year of operations following closing, PLC management expects Signature to generate approximately US$32.9 million of revenue and US$9.6 million of EBITDA. If Signature achieves these results and expected synergies are realized the purchase price of US$123 million would represent a multiple of approximately 9.8x EBITDA.

The transaction is expected to be immediately accretive to both PLC’s adjusted net earnings per share and adjusted EBITDA per share before any synergies are achieved. Management also expects annual synergies of approximately US$3 million to be realized within 24 months following closing, with a one-time cost of US$750 thousand, primarily in the areas of IT systems, back office integration, consolidated procurement, implementing proven sales practices into different operational areas and management team optimization.

Immediately following closing PLC’s leverage level is expected to be 1.2x adjusted EBITDA, providing the Company with flexibility to invest in organic growth and acquisition opportunities as they arise.

The Acquisition was funded using the proceeds from the Company’s bought deal offering of subscription receipts (the “Subscription Receipts”), which closed on May 4, 2018.

In accordance with the terms of the Subscription Receipts, each Subscription Receipt was exchanged for one common share of the Company (a “Common Share”) on May 7, 2018, and the net proceeds from the sale of the Subscription Receipts were released from escrow for the purposes of completing the Acquisition.

The Subscription Receipts are expected to be delisted from the Toronto Stock Exchange (the “TSX”) following the close of markets on May 7, 2018, and the Subscription Receipts will be automatically reorganized into Common Shares.

The securities offered pursuant to the subscription receipt offering have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, (the “1933 Act”) and may not be offered, sold or delivered, directly or indirectly, in the United States, or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the 1933 Act), except pursuant to an exemption from the registration requirements of the 1933 Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States or to, or for the account or benefit of, U.S. persons.

About Park Lawn Corporation:

PLC provides goods and services associated with the disposition and memorialization of human remains. Products and services are sold on a pre-planned basis (pre-need) or at the time of a death (at-need). PLC and its subsidiaries own and operate 139 businesses including cemeteries, crematoria, funeral homes, chapels, planning offices and a transfer service. PLC operates in five Canadian provinces and ten US states.

For further information: Andrew Clark, Chairman & Chief Executive Officer, (416) 231-1462; Joseph Leeder, Chief Financial Officer & Director, (416) 231-1462; Suzanne Cowan, VP, Business Development & Corporate Affairs,, (416) 231-1462

Photo courtesy of JMH Capital Partners