I think it is fair to say that overall investors have been wary of the inflationary environment and rising interest rates over the last couple of years.  However, one side benefit to that wariness may be, according to this article from Marketwatch, that “capital waiting to be deployed” in the private equity market has risen to what many believe is a record of $2.59 trillion.

 

And, I’m also guessing that there are some investors who are very interested in the changing face of Death Care and may be willing to deploy that capital in what they believe will be growing and profitable segments of the industry.  Over the past 24 months we’ve seen a little portrait of how private equity may be re-shaping the ownership of Death Care businesses across the globe   —  it’s happened with Dignity plc and Pure Cremation in Great Britain, and with StoneMor (now Everstory Partners) in the United States, and most recently with the TPG Capital purchase of Australia’s InvoCare.

 

It’s no secret. . . .private equity investors believe that they have found undervalued assets in the Death Care business.  Do they still think that way?  If so, what parts of the Death Care business might be next in their sights?

 

I don’t think that private equity buying individual funeral homes makes much sense. . . . it is just too long a ramp up in potential growth for their appetites.  Although Foundation Partners, with private equity help, grew patiently to a going-concern company of about 270 locations as of today.

 

I do, however, see private equity looking at the many regional funeral home consolidators that may, for many different reasons, be ripe for sale. . . . . And, I do see an opportunity for private equity to finance the right group of executives in turning a collection of these regional operators into a national group with the sale to another private equity company or a public offering as an off-ramp. . . .

 

Or, what about a private equity group looking at one of the smaller public companies as an acquisition in a “take-private” move as happened with StoneMor, Dignity plc in Great Britain, and InvoCare in Australia and New Zealand?  That type of move is not out of the realm of thought either.

 

What about funeral and cremation suppliers?  Could we have another move such as the Tribute Technology game-plan where different suppliers to funeral homes were acquired and then packaged together as one company and re-sold for over a billion dollars?   Tribute Technology, by all outside viewpoints, looks like it is doing extremely well with this plan and execution.  (See an article on the Tribute Technology story here)

 

Could we look for private equity to consolidate other Death Care related companies into larger concerns with more scale than what is offered today? . . . Could that be done with preneed companies, cremation memorialization companies, Direct to Consumer casket companies, or even companies just getting started in celebration events, online cremation, natural organic reduction, and alkaline hydrolysis?

 

I don’t know what the moves will be in 2024, but I’m guessing if the past is any indication of the future we will be seeing finances being directed into Death Care businesses in ways we have never seen before.

 

Related Article —  KKR completes acquisition of Global Atlantic Financial, including their Preneed life insurance market.  Fitch Ratings

 

Global Atlantic Preneed

 

More news from the world of Death Care:

• Five ways to reduce funeral costs.  AARP
• On Your Side:  Forsyth funeral home closes, causing confusion for clients.  Video story and print article.  KY3 – Springfield (MO)
• Truck plows through national cemetery, breaking veterans’ headstones.  Video story and print article.  Fox Carolina – Greenville (SC)

 

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