SYDNEY, AUSTRALIA: Propel Funeral Partners Limited (ASX: PFP), a leading provider of funeral and related services in Australia and New Zealand, has announced that it has signed a conditional sale agreement to acquire Southern Funeral Home, a well-established funeral business that operates from five locations in New Zealand.
The acquisition, which is expected to be completed by 30 June 2024, will add to Propel’s network of 145 locations and 31 crematoria across both countries.
Southern Funeral Home has been serving the communities of Gore, Cromwell, Alexandra and Queenstown for almost 30 years, generating approximately A$2.0 million of revenue and conducting around 270 funerals in its last financial year.
The total consideration for the acquisition is approximately A$4.6 million, of which about 65% relates to the purchase of real estate, including a cremation facility. Propel will pay A$4.4 million in cash and issue 44,971 Propel ordinary shares on completion of the deal. An additional cash payment of up to A$0.5 million may be made if certain financial targets are met in the next four years.
The acquisition is subject to customary conditions, such as due diligence, third party consents and contract assignments. Propel expects the acquisition to be earnings accretive in the first year of ownership.
The deal is the eighth acquisition that Propel has completed or announced in the financial year 2024 to date, demonstrating its strong growth strategy and commitment to delivering value to its shareholders and customers.
Propel also reported that it achieved material growth in its key operating and financial metrics in the six months ended 31 December 2023, despite the funeral industry facing a challenging comparison period due to the COVID-19 pandemic. Propel reaffirmed its guidance for the full financial year 2024, expecting to deliver revenue of A$210 million to A$230 million and EBITDA of A$65 million to A$75 million.