SYDNEY, AUSTRALIA: Propel Funeral Partners Limited (ASX: PFP), a provider of funeral and related services in Australia and New Zealand, has announced that it has signed binding legal documents to acquire two long established funeral service businesses and related assets, infrastructure and real estate in New Zealand for up to A$38 million.
The acquisitions relate to Harbour City Funeral Home, which operates from nine locations in and around Wellington, and Terry Longley & Son, which operates from three locations in the Hawkes Bay region. Together, the businesses generated A$12 million of revenue and performed 1,300 funerals in their last financial year. Propel will also acquire 11 properties, including a cremation facility, on completion of the acquisitions.
The acquisitions will expand and broaden Propel’s network in New Zealand, facilitating its entry into a new metropolitan market (Wellington) and a new regional market (Hawkes Bay). The businesses operate under long established brands with over 30 to 140 years of history.
The total consideration payable for the acquisitions is up to A$38 million, of which approximately 50% relates to the acquisition of real estate. The consideration comprises A$36 million in cash payable on completion, A$1 million via the issue of 282,830 Propel shares on completion, and up to A$1 million in cash contingent on certain financial milestones being achieved over the next three years.
The acquisitions are subject to customary conditions and are expected to complete during the first half of FY24. The acquisitions are expected to be earnings accretive in year one.
The cash required to complete the acquisitions will be funded from Propel’s recently expanded and extended senior debt facilities, following which the company’s estimated available funding capacity will be A$74 million.
Propel Funeral Partners is a leading provider of funeral and related services in Australia and New Zealand, operating from 150 locations. The company’s vision is to provide personalised care for families at their time of need.