Finance

Park Lawn makes earning season splash with large aquisition

Foundation Partners why I partnered

Park Lawn Corporation announced yesterday in this press release that they have acquired substantially all of the assets of the Schackelford Corporation based in Western Tennessee.  The Schackelford Corporation encompasses a fifth-generation company that has served Western Tennessee for 90 years.  According to the press release the acquisition includes eight stand-alone funeral homes, two stand-alone cemeteries, and one on-site funeral home and cemetery.

The release also indicates that the acquisition will bring an approximate 1,577 calls per year and 152 interments per year to the Park Lawn Corporation portfolio of services.  It is expected that once fully integrated the Schackelford group of businesses will contribute about US $3.4 million in Adjusted EBITDA to Park Lawn Corporation annually.

Park Lawn Corporation, according to the press release had corporate wide Adjusted EBITDA of US $76.2 million in the calendar year of 2021.  So, the additional US $3.4 million of Adjusted EBITDA would add about 4.5% to the current number at Park Lawn Corporation.

Here’s what Park Lawn Corporation’s CEO J. Bradley Green said of the transaction, “Shackelford is a strategic addition to Park Lawn’s portfolio as it expands across Tennessee into the western half of the state.  Five generations of the Shackelford family have dedicated themselves to serving their communities for over 90 years.  And, throughout that time, they have established and maintained a reputation of quality, sincerity and trust with the families they serve.  We are honored to welcome the Shackelfords and their team into the Park Lawn family and look forward to continuing their dedication to excellent service.”

One of the Shackelford Funeral Directors websites:

Funeral Director Daily take:  One of the things I like about Park Lawn Corporation press releases is their frankness in telling the public about the size and scope of their acquisitions.  From my experience, they are the only public company that routinely tells you what they are bringing to the existing company in terms of number of calls and financial matters.

Tom Anderson
Funeral Director Daily

For instance, if you read the entire press release you will see the following statement, “The agreed upon purchase price multiple for the transaction is slightly greater than PLC’s (Park Lawn Corporation) publicly-stated targeted Adjusted EBITDA multiple range for its historical transactions.”

That item indicates to me that this group of death care facilities may have been a coveted property on the market and Park Lawn Corporation was willing to go above and beyond to add it to their group.

That brings me to this point that is very timely. . . . according to accounting firm KPMG, business acquisitions are down about 25.8% for the first-half of 2022 as compared to the number of deals done in the same period of 2021.  You can see a graph on that from this article by Yahoo Finance published just yesterday.

The article does say that some large deals have been consummated in the past couple of weeks and ponders what is to come.  It also comments that rising interest rates may be holding some deals back.

However, Marc Kushner of Dorsey & Whitney’s U.S. Mergers and Acquisitions practice insinuates that the deal making may start moving with this comment from the article, “There is a sense that prices have dipped, and that there’s some value to be had particularly if you’re in the market for something that’s an important strategic acquisition.. . . .You might or might not be at the bottom of the value market, but low interest rates are already gone and it’s only going to get worse in the short-term.”

Disclaimer — The author of this Funeral Director Daily article holds a stock position in Park Lawn Corporation

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