Mergers and acquisitions in the death care space are nothing new and actually seem to be accelerating in not only the retail funeral home and cremation space but among suppliers as well.  Earlier this week we learned of Foundation Partners Group acquiring the Loyless Funeral Homes of Florida and we learned of Wilbert Funeral Services, Inc. (WFSI) moving ahead with due diligence to purchase assets of Astral Industries, manufacturer of Astral caskets.

Foundation Partners Group —  You can read about the acquisition of Loyless Funeral Homes in a press release here.  In essence, Foundation Partners Group is purchasing what started as the Florida Mortuary Funeral and Cremation Services in 1987 in the Tampa market and has expanded to include a full service funeral home in Land O’Lakes, Florida.  According to the press release this acquisition by Foundation Partners brings their presence in Florida to 21 properties and allows the company to build out their presence in the Tampa market.

Earlier this fall, Foundation Partners followed the same modus operandi by making acquisitions adding to their presence in the Georgia, Idaho, and Oregon markets.  From our point of view at Funeral Director Daily we seem to notice a pattern of Foundation Partner acquisitions whereby their targets are high percentage cremation firms.

Wilbert Funeral Services – We learned earlier this week of Wilbert Funeral Services entering into a letter of intent to purchase certain assets of Astral Industries of Lynn, Indiana.  Astral has been in business for 46 years and supplies steel caskets across the continental United States.  It is also noted that Astral maintains a fleet of trucks that provide delivery of the product to independent casket distributors.  Wilbert Funeral Services is a leading provider of burial vaults and cremation products.

From our point of view at Funeral Director Daily this is a very interesting marriage.  From what we know anecdotally about the American casket and vault market, this would appear to be a union of two companies that can look forward to a higher cremation percentage that you would think would lead to less demand, and sales, of vaults and caskets.  We look at this acquisition in that regard as a chance to potentially reduce management which could save on overhead and lead to greater profits — even in a diminishing market.

It is interesting, however, that the American casket market has about $657 million in wholesale sales.  We know that Batesville and Matthews Aurora receive a total of about 75% of the market.  That would mean that there is about $167 million left for all of the other competitors and if Astral had a 5% market share (of the $657 in total sales), which we believe to be high, there revenues would be about $32 million.  We also know that the American casket market has been in decline at a rate of about 3.6% per year.  It is this “decline challenge” that will be Wilbert’s biggest obstacle to implementing a successful acquisition.  You can read an article we did about a year ago on the American casket market here.