Propel Funeral Partners (ASX:PFP) has executed a binding sale agreement to acquire two funeral service businesses and one pet cremation business, including related assets, real estate and infrastructure for the consideration of up to $36.9 million.
The company says these 3 acquisitions will broaden its network within Australia and New Zealand, securing the company’s expansion in an existing metropolitan funeral market (Adelaide), entry into a new metropolitan funeral market (Hamilton), and a new metropolitan pet loss market (Auckland).
Adding on, Propel Funeral Partners notes the 3 acquisitions relate to Alfred James and Sons, Seddon Park Funeral Home, and Pets at Rest, which operate within Adelaide, Hamilton, and Auckland respectively.
Together, these businesses have generated about $12 million in their most recent financial year, performed about 1,200 funerals and 7,000 pet cremations per year, and operate from 10 locations of which Propel will acquire 8 properties, including 7 in metropolitan Adelaide.
In addition, the total consideration of the $36.9 million will comprise $36.1 million in cash to be paid on completion of the proposed transactions, of which 75% relates to the acquisition of real estate, and up to $800,000 which will be payable in cash if certain financial milestones are achieved during the 3 years following completion of the relevant transactions.
Completion of the acquisition of Alfred James is expected to occur during Q4 FY23 subject to satisfaction of customary conditions, meanwhile the acquisitions of Pets at Rest and Seddon Park are expected to occur during Q2 and Q3 of FY23 respectively.
Meanwhile, the company is expected to release its FY23 half year results pre-market open on 22 February 2023.
Propel Funeral Partners is an ASX-listed company that represents the second largest provider of death care services in Australia and New Zealand. The company currently operates from 152 locations, including 35 cremation facilities and 9 cemeteries. Following the allowing of cash required to complete the 3 acquisitions, Propel’s available funding capacity is $104.5 million.