Stewart Enterprises Making Plans to Go On Buying Spree?
Stewart Enterprises Inc., the second-largest provider of funeral services in the nation, said Wednesday that it will begin considering possible acquisitions and has hired an industry veteran to guide the process.
The addition of Glenn McMillen to Stewart’s corporate development team is part of a long-term strategy by the Jefferson, La.-based company that “includes growing our business through acquisitions,” said Stewart’s chief executive, Thomas Crawford.
Stewart did not say in the company announcement if possible acquisitions have been pinpointed. But company vice president Martin R. de Laureal said McMillen “will focus on finding the right acquisition opportunities for us to consider.”
“Adding resources to accomplish this objective further demonstrates our commitment to identifying … acquisition opportunities in 2011 and beyond,” Crawford said.
Stewart currently owns and operates 218 funeral homes and 141 cemeteries in the United States. The company did not say how large it wanted a possible expansion of its business to be.
McMillen is a 40-year veteran of the funeral business after serving in various senior management posts, including senior vice president for Stewart’s larger rival Houston-based Service Corp. International. He also is a past president of the National Funeral Directors Association and the Pennsylvania Funeral Directors Association.
During the 1990s, Stewart and other publicly traded funeral providers went on buying sprees of independent funeral homes and cemeteries both in the United States and abroad, leading Wall Street to tout the companies as growth stocks. Analysts said aging baby boomers would lead the companies into steady profits.
But much of the growth failed to materialize as consumers opted for less-expensive funeral services and cremation.
In 2008, Service Corp. International — or SCI — made a $1.5 billion offer to acquire Stewart Enterprises. But the offer was withdrawn after Stewart demanded that SCI finance the entire deal, assume all responsibility and risk for gaining regulatory approval and raise its offer. At the time, SCI’s offer was valued at about $11 per share.
In Wednesday trading, Stewart shares were up 21 cents, or 3.3 percent, at $6.66. The shares have traded in a 52-week range of $4.50 to $6.99.
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