SYDNEY, AUSTRALIA: In a significant expansion of its network in Australia and New Zealand, Propel Funeral Partners Limited (ASX: PFP) has announced the successful execution of binding agreements to acquire four well-established funeral service providers.
The deal, valued at approximately A$12.0 million, marks a strategic move to broaden Propel’s presence in the funeral industry.
The acquisition encompasses Brunswick Valley Funerals in Mullumbimby, NSW; Gladstone Valley Funerals in Gladstone, QLD; Osbornes Funeral Directors in Rotorua, NZ; and Decra, a supplier of headstones and monuments in NZ.
These businesses have a combined history of over 125 years in the industry, with Brunswick Valley and Gladstone Valley serving their communities for 18 and 25 years respectively, while Osbornes and Decra have each been in operation for over 40 years.
The acquired entities collectively generated around A$6.0 million in revenue and conducted approximately 350 funerals in their last financial year. Propel will take ownership of two properties upon settlement and lease three others, with options to purchase two in the future.
The total consideration for the acquisitions is split between A$11.5 million in cash and A$0.5 million through the issuance of 84,534 Propel ordinary shares.
An additional A$1.5 million may be payable contingent on achieving certain financial targets over the next three years. Propel plans to fund the cash portion through its debt facilities, which will leave the company with an estimated A$155 million in available funding capacity post-acquisition.
The acquisitions are slated for completion between Q4 FY24 and Q1 FY25, subject to customary conditions such as due diligence and third-party consents.
Propel anticipates that these new additions will be earnings accretive from the first year.
This move is expected to enhance Propel’s operational capabilities and solidify its position as a leading provider of funeral services in the region.