?? To preserves competition that would have been eliminated by Service Corporation International?s acquisition of Keystone North America Inc., SCI will be required to sell 22 funeral homes and four cemeteries in 19 local markets, according to the Federal Trade Commission. In the case of one property which is a combination operation, the FTC is only requiring that the funeral home be divested, but logistically both properties will be sold off, thereby raising the number of cemeteries on the block to five. The consent order detailing the requirements resolves the FTC?s concerns that the acquisition would be anticompetitive.
According to the FTC, SCI?s proposed acquisition of Keystone, the fifth-largest funeral and cemetery services provider in North America, raised antitrust concerns in the markets for both funeral services and cemetery services.
The 16 geographic funeral services markets affected by the acquisition include: Yuma, Ariz.; Monterey, Calif.; Denver, Col.; Auburndale/Winter Haven, Fla.; Vidalia, Ga.; Bossier City, La.; Lansing, Mich.; East Aurora, N.Y.; Northern Rockland County, N.Y.; Charlotte, N.C.; Greensboro, N.C.; Columbia, S.C.; West Columbia/Lexington, S.C.; New Tazewell, Tenn.; Lynchburg, Va.; and Yakima, Wash. The three geographic cemetery services markets are: Yuma, Ariz.; Macon, Ga.; and Columbia, S.C.
The funeral and cemetery services markets in each of these local areas are highly concentrated, and SCI?s acquisition of Keystone as proposed would have eliminated the intense head-to-head competition between these firms in each of the 19 local geographic markets. The complaint alleges the transaction would have increased the likelihood that the combined firm could raise prices either unilaterally or through coordination with remaining competitors.
The FTC?s consent order requires that SCI sell the funeral homes and cemeteries to FTC-approved buyers within 90 days of SCI?s acquisition of Keystone. In addition to requiring SCI to sell the funeral homes and cemeteries, the order requires SCI to sell related equipment, customer and supply contracts, and other assets such as trade names and property in each of the markets at issue.
According to the FTC, the proposed order contains several provisions to ensure that the divestitures are successful:
1) the FTC will evaluate all proposed buyers to ensure they will be able to compete effectively after SCI takes over Keystone;
2) if SCI fails to divest the assets within 90 days, the FTC will be able to appoint a trustee to ensure the assets are sold;
3) SCI must provide transitional services to the buyers the FTC approves to ensure a smooth transition of the assets and their continued operation;
4) the order requires SCI to remove any impediments that might prevent current managers of the 22 facilities from working for the new owner(s); and
5) SCI must maintain the viability of the facilities until the divestiture process is complete.
According to the FTC, the following facilities must be divested before April 26:
Sunset Vista Cemetery, 11357 East 40th Street. Yuma, Ariz.
Sunset Vista Funeral Home and Crematory, 11357 East 40th Street, Yuma, Ariz.
Glen Haven Memorial Gardens, 7070 Houston Road, Macon, Ga.
Kersey Funeral Home, 108 East Lake Stella Drive, Auburndale, Fla.
Stewart Funeral Home, 1722 Mount Vernon Road, Vidalia, Ga.
Jones-Stewart Funeral Home, 211 West Liberty Avenue, Lyons, Ga.
Ronnie L. Stewart Funeral Home, 200 South Second Street, Glenwood, Ga.
Boone Funeral Home, 2156 Airline Drive, Bossier City, La.
Tiffany Funeral Home, 3232 West Saginaw Street, Lansing, Mich.
Lambeth Troxler Funeral and Cremation Services, 300 West Wendover Avenue, Greensboro, N.C.
Hankins and Whittington Funeral Service, 1111 East Boulevard, Charlotte, N.C.
T.J. McGowan Sons Funeral Home, 71 North Central Highway, Garnerville, N.Y.
T.J. McGowan Sons Funeral Home, 133 Broadway, Haverstraw, N.Y.
Claiborne Funeral Home, 1106 Highway 33 South, New Tazewell, Tenn.
Diuguid Funeral Service and Crematory, 811 Wiggington Road, Lynchburg, Va.
Diuguid Funeral Service and Crematory ? Waterlick Chapel, 21914 Timberlake Road, Lynchburg, Va.
Shaw and Sons Funeral Directors, 201 North Second Street, Yakima, Wash. 98901
Mission Memorial Park and Seaside Funeral Home, 1915 Ord Grove Avenue, Seaside, Calif.
Mission Mortuary, 450 Camino EI Estero, Monterey, Calif.
Funeraria Latina-East, 6601 East Colfax Avenue, Denver, Col.
Kenneth Howe Funeral Home, 64 Maple Street, East Aurora, N.Y.
Froehley-Dengler Funeral Home, 64 Maple Street, East Aurora, N.Y.
Greenlawn Memorial Park and Funeral Home, 845 Leesburg Road, Columbia, S.C.
Woodridge Memorial Park and Funeral Home, 138 Corley Mill Road, Lexington, S.C.
Although not mandated by the FTC, SCI decided that one funeral home no longer fit in the companies strategic plan and would be divested: Louisiana Funeral Home and Cremation Care, 3903 Meriwether Road, Shreveport, La.
?We welcome the Keystone associates into the Dignity Memorial family,? said Tom Ryan, SCI president and chief executive officer. ?The acquisition is a great complement to the more than 300 similarly situated businesses we currently operate and will provide a platform to grow our business in this valuable segment.?
In connection with the offer, the board of directors of Keystone has been replaced by nominees of SCI, with Mr. Steven Tidwell remaining as a director of Keystone.
Source: Memorial Biz Journal
