LM, which traces its roots back to the Victorian era, was acquired by Sovereign in 2003 and has engaged on somewhat of an acquisition spree ever since, snapping up independent funeral director?s businesses wherever it can and generally further consolidating the increasingly consolidated UK funerals business. It made five purchases of independents during 2010 and has grown from 29 to 65 branches since 2003. Apart from Sovereign Capital, much of the expansion finance has come from the UK government?s 84% bailout bank star, RBS (Royal Bank of Scotland ? news passim).
News of the potential sale hasn?t stopped LM?s acqusitive streak ? only last month, LM Funerals bought up the Lichfield, Staffordshire business of F M & J Wait & Co Limited, a prestigious family-run business that has been operating for over 200 years. The fifth generation business was set up by vendor Jonathan Wait?s great-great-grandfather. Typical of many of LM?s acquisitions, Jonathon will remain at his former firm ? which will continue to trade through its locally recognized brand ? in his current role of lead funeral arranger and conductor.
Since November 2010, LM has been powered ahead by Chief Executive Deborah Kemp, who has significant experience working with multi-site companies ? she was previously Chief Operating Officer of De Vere Hotels & Resorts and prior to this, Managing Director of Punch Taverns. (She knows how to hold a good wake then?! ? ? Ed.)
Kevin Whittle, Partner at Sovereign Capital, commented at the time: ?The acquisition of a fifth highly regarded funeral business in only 12 months reinforces LM Funerals? position as one of the leading funeral services companies in the UK. In this fragmented market there is room for further expansion and we look forward to LM Funerals continuing its strong deal flow in 2011.?
A Strategic Review of Operations
But now it seems the ?strong deal pipeline? will now continue to be fed under new owners. Who might be waiting to give Sovereign their well-deserved respectable exit? The private equity firm appointed BDO to run the calculator over the LM balance sheet last year, who came up with a recommendation for a ?strategic review of its operations.? Or a sale that is, depending on how you view it.
Step forward the usual line of rival private equity operators, trade competitors and interestingly in LM?s case, a number of high net worth individuals: WIREDVC understands that London based mid-market operators LGV Capital, insurer Legal & General?s VC arm and owner of Vue cinemas and a couple of UK pub (bar), restaurant and leisure businesses, plus dentists, healthcare and private hospitals ? could be one potential buyer for LM Funerals.
Reportedly next in line is another UK mid-market hevyweight: LDC, the wide ranging private equity subsidiary of the other big UK bailout bank ? Lloyds Banking Group. London and Manchester based ECI are also thought to be interested in the LM Funerals business.
But more interestingly would be a trade sale ? there are a few other big consolidated funeral operators in the UK who could make a bid, or tantalisingly ? one of those high net worth individuals, one of whom is understood to be currently leading the bidding process. We shall have to wait and see ?
