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.
Cautionary Statement Regarding Forward-Looking Information
This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the
business of the Company and the environment in which it operates. Forward-looking statements are identified by words such as
"believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate" and other similar expressions. These
statements are based on the Company's expectations, estimates, forecasts and projections and include, without limitation,
statements regarding the Company's continued growth strategy, the anticipated effect of the Acquisition on the performance of the
Company (including the extent to which the Acquisition is expected to be accretive to adjusted net earnings per share and
adjusted EBITDA per share and post-closing leverage), the quantum and timing of potential cost synergies, expected revenues,
expected EBITDA and the expected purchase price multiples. The forward-looking statements in this news release are based on
certain assumptions, including without limitation that Signature's business will continue its recent trend of improved operating
performance, the Company will be able to implement business improvements and achieve cost savings, the Company will be able to
retain key personnel, there will be no unexpected expenses occurring as a result of the Acquisition, and that currency exchange
rates remain consistent. They are not guarantees of future performance and involve risks and uncertainties that are difficult to
control or predict. A number of factors could cause actual results to differ materially from the results discussed in the
forward-looking statements, including, but not limited to, the factors discussed under the heading "Risk Factors" in the
Company's annual information form available at www.sedar.com.
There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ
materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any
such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and,
except as expressly required by applicable law, the Company assumes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future events or otherwise.
Non-IFRS Measures
EBITDA, adjusted EBITDA and adjusted net earnings are not measures recognized under IFRS and do not have standardized meanings
prescribed by IFRS. Such measures are presented in this news release because management of the Company believes that such
measures are relevant in interpreting the effect of the Acquisition on the Company. Such measures, as computed by the Company,
may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to
similar measures reported by such other organizations. Please see the Company's most recent management's discussion and analysis
for how the Company reconciles such measures to the nearest IFRS measure.
SOURCE Park Lawn Corporation
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