
TPG targets $1.2b Australia funeral services take-private

TPG Capital has submitted a buyout offer for Invocare, a listed Australian provider of funeral services and operator of memorial parks and crematoria, that values the company at approximately AUD 1.8bn (USD 1.2bn).
The private equity firm is willing to pay AUD 12.65 per share in cash for all outstanding shares, according to a filing. Acting through its eighth pan-Asian fund, which reached a first close of USD 3.4bn last year against an overall target of USD 6bn, TPG has accumulated a 17% equity interest in Invocare, which could deter rival bidders.
This offer price represents a 41% premium to Invocare’s March 6 closing price. As of midday trading on March 7, the stock was up 35% at AUD 12.08. Invocare was trading around the AUD 11 mark until late February when it announced that a net loss of AUD 1.8m for the 2022 financial year – compared to a net profit of AUD 80.2m in 2021 – following a mark-to-market revaluation of pre-paid funerals.
The company operates 300 funeral locations, 17 cemeteries, and 29 crematoria across Australia, New Zealand, and Singapore. Australia is the largest market, accounting more than 280 facilities and 40,000 funeral services in 2022. New Zealand and Singapore saw 8,000 and 2,000 funerals, respectively, while there were 26,000 cremations and burials and 99,000 pet cremations.
Operating revenue rose 12% year-on-year in 2022 to AUD 588.5m while operating EBITDA climbed 9% to AUD 136.2m. Australia alone contributed AUD 147.6m in operating EBITDA with AUD 90.1m of that coming from funerals.
However, non-operating EBIT slumped from AUD 49.5m to a deficit of AUD 73.3m. This reflects a change in the value of funerals that are pre-paid at a set rate, with Invocare investing the proceeds until the time of redemption. Public market volatility resulted in a net loss of AUD 55.6m on these undelivered contracts versus a net gain of AUD 44.1m in 2021.
Funeral services have proved a popular target for private equity across Asia, driven by ageing populations, industry consolidation opportunities, and the innate appeal of a business model that commands significant upfront payments and sometimes long-delayed redemptions.
CVC Capital Partners still owns Nirvana Asia, having delisted the largely Southeast Asia-focus business at a USD 1.1bn valuation in 2016. Advantage Partners acquired Japan’s Kizuna Holdings in 2015 and took it public five years later, while VIG Partners combined Korea-based Preed and Joun Life and then made a partial exit at a valuation of around USD 430m in 2021.
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