BREAKING: Park Lawn Announces It’s Going Private; Selling to Homesteaders Life & Birch Hill Equity Partners for $26.50 Per Share
In an after-hours June 3 release, Park Lawn Corporation has announced that it has entered into a purchase agreement with Viridian Acquisition Inc. (an affiliate of Homesteaders Life Company) and Birch Hill Equity Partners Management Inc. Viridian and Birch Hill will acquire all of the issued and outstanding common shares of Park Lawn in an all-cash transaction valued at approximately $1.2 billion. Shareholders will receive $26.50 per share, a significant (62.1%). premium over the recent Toronto Stock Exchange trading price.
A special committee of Park Lawn independent directors and outside advisors, including National Bank Financial, Inc., unanimously approved of the transaction, stating that the sale “is in the best interests of Park Lawn and is fair to shareholders.” The opinion of National Bank Financial, Inc. is that the $26.50 per share payout is “fair, from a financial point of view,” to shareholders.
“We have concluded that this transaction is in the best interests of Park Lawn and fair to our shareholders,” said John Nies, chair of the special committee. In addition to his position as a member of the Park Lawn Board of Directors, Nies is Managing Partner at JMH Capital Partners, LLC, a private equity firm based in Boston, Massachusetts. “With a view to maximizing shareholder value, we conducted a thorough assessment of the Purchaser Group’s proposal as well as other alternatives available to the company, including the status quo. Following a comprehensive assessment and our extensive negotiations with Homesteaders and Birch Hill, we are pleased to have reached an agreement that provides immediate and fair value to shareholders.”
The move is expected to support Park Lawn’s strategic initiatives and assure long-term benefits for stakeholders. It follows the unusual March 2024 earnings call, during which Park Lawn provided “annual guidance” instead of “issuing long-term goals” for the first time in its history, according to a March 8 story in Funeral Service Insider (FSI), a Kates-Boylston publication.
FSI author Tony Russo wrote that two recent events “derailed” the long-term line of thinking. Connecting Directors first broke the news of the first event in June 2023, in which Park Lawn proposed the acquisition of Carriage Services, Inc. Twelve hours later, Park Lawn issued a statement that the company was reviewing “strategic alternatives.” That offer was officially withdrawn in October.
The second significant event involved Park Lawn’s divestiture of 83 properties. According to Russo, Park Lawn CEO Brad Green “said that, while both of these moves provided the company significant benefit, they also wreaked havoc with the larger long-term plans.”
The agreement with Viridian/Homesteaders will seemingly revive Park Long’s long-term strategizing, according to a statement issued by Green on June 3.
“This Transaction represents tangible recognition of the value and strength of our organization” Green said. “We are proud of the accomplishments of our team and look forward to partnering with Homesteaders and Birch Hill in a new chapter of Park Lawn where we can continue to execute on our strategic initiatives for the benefit of our stakeholders in the long-term.”
“We have confidence in Park Lawn and their team and believe that, in partnership with Birch Hill, we are well positioned to support them through this transition given our mutual commitment to the funeral and cemetery profession,” said Steve Shaffer, Homesteaders President, CEO and Board Chair. “Homesteaders’ secure, stable financial position enables us to make long-term capital investments to support providers like Park Lawn while maintaining the financial strength that has made us a reliable partner for funeral providers and a safe funding vehicle for our policy owners for 118 years.”
