InvoCare Continues Purchase Pattern

InvoCare, Australia’s leading national provider of funerals and cremations, announced earlier this week that it will continue to build its regional markets.  They did so in the New South Wales/Victorian border area by purchasing the Lester and Son Mortuary.  You can read a clip on the acquisition here.

The purchase includes two fully equipped funeral homes and a separate crematorium.

Lester and Son is considered the leading mortuary in the area and is said to handle the remains of about 460 people annually – of which 200 calls are cremation.  Revenue for the company is believed to be about US $2.5 million.  Here is a link to the Lester and Son Mortuary business.

Funeral Director Daily take:  Management at InvoCare understands that the death rate in Australia is expected to pick up in the near future.  Creating a “volume” business seems to be what they are after.  What they are doing certainly mirrors what is going on in the United States.  In our opinion, these death care consolidators believe that volume is king and if you do not have a certain number of calls annually to spread overhead costs, business life will be difficult.

InvoCare is also trying to prevent competitor Propel Funeral Partners from getting too much traction on the volume side of things.  While prices have not been published on recent InvoCare acquisitions, we believe that the prices are on the high end of the historical perspective as there is competition in the industry down under.  On the other hand, at this point in time, the Australian consumer seems to be leery of funeral business pricing which may be causing some owners to think about getting out.

US $2.5 million for 460 calls is an average call price of only US $5,434.  The price that InvoCare paid will make a difference as to whether  they can get this to be accretive to their bottom line early rather than later.

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