Service Corporation International announced early Wednesday morning that they would be purchasing Stewart Enterprises for around $1.1 billion. The chatter around this acquisition hasn’t been positive (see comments left on our Facebook Page).
The boards of directors for both companies have approved the deal, which adds up to $1.4 billion when counting Stewart’s debt, but Stewart shareholders still need to vote on it. The companies expect to close the acquisition by the end of the year or in early 2014.
Service Corp. said the combination will generate about $60 million in annual savings, which will be fully realized over a two-year period after the deal closes. Savings will come from reduced expenses, the elimination of a duplicate public company and increased purchasing power.
So here’s the good news…If you’re a shareholder in either company your stock just took a really nice jump:
Shares of Stewart Enterprises jumped 34 percent, or $3.32, to $13.06 Wednesday before markets opened and after the companies announced the deal. Service Corp., meanwhile, climbed 6.7 percent, or $1.18, to $18.80.
The shares of both companies had already climbed more than 26 percent so far this year, as of Tuesday.
To any of you who worked for secure cash and either fired or just got fed up and jumped ship to Stewart, you had better start looking for another job. Why? Because SCI will find you on their (very private) no-hire list. Just when you are called into the ivory tower thinking you’re finally going to be getting that big 2% raise you’ve been waiting for the past 2 years, you will be terminated…again. This is good for somebody but not funeral service. Only thing that will stop this is an Embalmer’s (only) union. Another day and topic.