Back in 2017 when I served on the board of the University of Minnesota I had a hand in the hiring of new Head Football Coach P.J. Fleck.  Coach Fleck is still there and has had some success coaching in the Big Ten.  Outside of the improvement of our team, I have come to really believe in his philosophy of building young men into men of character — on and off the football field.

 

Coach Fleck has a unique way of going about instilling his culture and beliefs into the football team philosophy and one of his takes is that there is a big difference between “Failing” and “Failure”.  Here is a short 90-second video of his take on that.

 

It’s with that background that I looked at the 4th Quarter and Year End 2023 discussions by Carriage Services and Park Lawn Corporation in their respective earnings report and earnings call.

 

If you remember, it was made known that Park Lawn Corporation, on about June 13, 2023, made a bid to acquire Carriage Services for a reported $34 per share.  Carriage Services then announced that they would take a “Strategic Review” of their operation and other opportunities that they may have for their shareholders before announcing a decision.  Here is a Funeral Director Daily article on the original offer.

 

Then, on October 2, 2023, Park Lawn Corporation, in this press release, “announced that it has declined to participate further in Carriage Services, Inc.’s previously announced strategic review process and that it has withdrawn its all cash proposal to purchase the outstanding stock of Carriage”.

 

I thought of Coach Fleck last week in reading the Park Lawn Corporation Earnings Call transcript.  It came to my mind, that for whatever reasons the announced acquisition was never consummated, but it appears that the process of the potential of it happening may have turned out to be a positive for both companies.

 

Here’s what Carriage Services said in its press release of its Year-End Financial report:

 

“The Board of Directors (the “Board”) has concluded the Company’s strategic review process, first announced on June 29, 2023, which was overseen by the Board with assistance from experienced financial and legal advisors. The Board has unanimously determined that continuing to execute on the Company’s strategic plan as an independent, public company is in the best interests of the Company and its stockholders at this time. In this regard, the Board’s determination took into account positive trends described above in the Company’s financial and operating results toward the end of 2023. The Board remains committed to maximizing stockholder value.

While the Company received a number of proposals for transactions involving the Company in the course of the strategic review process, following a thorough review and evaluation of the proposals and alternatives available to the Company, the Board concluded that none of those proposals would be in the best interests of the Company’s stockholders. The Board endorsed the Company’s continued execution of its standalone business plans as an independent publicly held company under the leadership of Carlos Quezada as CEO, Steve Metzger as President and Kian Granmayeh as CFO, as well as leadership from the Company’s Board, which added three talented new directors during the summer of 2023″.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

And, here is how Park Lawn Corporation’s CEO J. Bradley Green summed up the process that his team went through in response to a question in last week’s Earnings Call:

. . It was this management team’s first opportunity to go through something like that and I would consider myself taking out the mix. It’s a fairly young management team. . . . When you go through a process like that with the banks, and especially with someone that’s a sophisticated partner like Brookfield, you get asked a lot of questions about a lot of things that you’re doing that makes you reflect upon whether or not you’re doing them the right way, whether you can approve on.

So we took that extensive process and we said, well, those are interesting questions and our answers are interesting. And maybe we can improve and improve here and improve there. It actually made its way that line of thinking made its way into our strategic presentation, the board where we were able to actually point out things where we could be better just based on the questions we were asked going through that process“.

 

So, from my point of view using the perspective of Coach Fleck, there was a “failing” of making a deal, but it certainly looks like there was no “failure” in that each company learned something about themselves that will, in the long run, probably make the companies more successful in their own right.  I think that is a “win” for both companies.

 

I also think it is a win for Death Care, funeral services, potential independent funeral home sellers, and the consumer public in general.  Competition is good — not only for consumers, but for competing funeral establishments.  It’s the American way and the competition should make each competitor sharpen their offerings to the public.

 

Having a lot of competition — whether it is Carriage Services, Park Lawn, Arbor Memorial, Service Corporation International, Legacy Funeral Group, Northstar Memorial Group, Newcomer Funeral Service Group, Foundation Partners Group or any other operator including all the regional and single facility independent operators– keeps everyone sharp.

 

And my guess is also that Park Lawn Corporation and Carriage Services learned a lot about themselves by taking a long, hard look at if this union would be good for them. . . or they were better going it alone.  My father used to say, “In life, some of the things you choose not to do turn out to be more important in your life than some things you choose to do”.  Thinking about my father’s advice, I think both companies made the right decision.

 

More news from the world of Death Care:

• Cutting the cost of dying.  Tips from experts.  BBC (Great Britain)
• Less than half the people have openly discussed their funeral wishes — survey.  Yahoo Finance
• Family sues Maryland medical examiner’s office, claiming unauthorized cremation.  The Daily Record (MD)

 

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