The Journey Group, a death care industry consolidator based out of the New Orleans area, announced last week the purchase and acquisition of two firms in the greater Birmingham, Alabama, area. Both firms are metropolitan combination firms — each with a funeral home facility on a cemetery property.
According to the press release that you can read here, this brings The Journey Group’s Alabama holdings to four cemeteries and five funeral homes.
The Journey Group is led by CEO Larry Merington and COO Glenn McMillan. Merington was a former Senior Vice-President of large funeral home and cemetery consolidation company Stewart Enterprises, which was eventually sold to Service Corporation International. McMillan, among other things, formerly served as an executive with Service Corporation International. The Journey Group was founded in 2014 and now, according to the press release, is engaged in acquiring and operating independent death care facilities in metropolitan areas across the country. The recent Alabama purchases brings their total to 13 operating locations. You can learn more from their web-site here.
Funeral Director Daily take: It is our opinion that there are a lot of acquisition companies chasing independent funeral homes. We think it is indicative of the financial backing that is available in the U.S. today. There has been a lot of great returns since the market downturn of 2008 and those investors are looking to plow profits back into more investment. I’m involved in four different start-ups and one roll-up outside of the funeral industry and I can say that, investment in return for equity stakes has been the least of our issues over the last three years. The funeral industry is no different and money is flowing to those that prove, and have a track record, that they can operate death care businesses profitably.
What a great time to be an independent operator that has the minimum number of calls these acquisition companies are looking for. Those calls vary dependent on if the company likes to invest in rural funeral homes or, as it seems with The Journey Group, large metropolitan areas. I think that there is opportunity in both markets to different degrees and with differing business philosophies.
The one thing all acquisition companies want is favoring demographics. I was fortunate to be in such a situation where the future demographics of my community looked really good. If you are an independent operator that is within ten years of looking to cash out. . . now might be a good time to put a plan together. If the demographics are good — there will be no shortage of offers.
It is my opinion also, sometimes the growing future demographics of an area may actually be worth more to the eventual sale price than the actual numbers of calls you are doing today. If you have no idea where to turn for information like this — send me an e-mail with contact information and I will point you in the right direction.