Propel Funeral Partners (ASX: PFP) has announced the acquisition of two long-established funeral service providers in New Zealand, expanding its presence into new regional markets. The total purchase price for both acquisitions is up to $7.3 million, funded through the company’s debt facilities.
Details of the acquisitions
Propel has executed agreements to acquire:
- Twentymans Funeral Services and Thames Crematory, which has operated in the Thames region since 1867 and also offers pet loss services under the Forever Pets brand.
- Richmond Funeral Home and Clareville Crematorium, a funeral provider serving the Carterton area since 1887.
Together, these businesses conducted approximately 600 funerals last year, generating $3.7 million in revenue. They operate across seven locations, with Propel acquiring three properties outright and leasing the remaining four, with purchase options available on three of them.
Transaction structure
The total consideration of $7.3 million will be paid as follows:
- $6.7 million in cash upon completion.
- $0.1 million in Propel ordinary shares (15,245 shares).
- Up to $0.5 million in additional cash, contingent on financial milestones over the next four years.
Strategic importance
The acquisitions further Propel’s footprint in New Zealand, where it has been expanding in recent years. The company, already the second-largest death care provider in Australia and New Zealand, operates from 198 locations, including 38 cremation facilities and nine cemeteries.
The company expects the acquisitions to be earnings accretive within the first year and plans to complete the transactions in the second half of FY25, pending customary conditions such as regulatory approvals and contract assignments.
