In what seems to be a growing trend of taking public deathcare companies private, TPG Global, a subsidiary of San Francisco-based TPG Capital, has made an offer to purchase InvoCare Ltd., the largest deathcare provider in the South Pacific.
News of the unsolicited offer broke early on the morning of Tuesday, March 7 following a late Monday night stock purchase in which TPG obtained a 17.8% stake in Invocare. TPG’s buyout proposal is reported to be $12.65 per share for the Sydney, Australia-headquartered InvoCare, which is valued at $1.22 billion (U.S.). Reports of the proposal drove InvoCare’s stock up by 35% Tuesday morning before falling slightly later in the day.
Who is InvoCare?
InvoCare Ltd., owns funeral homes in Australia, New Zealand, and Singapore and memorial parks and crematoriums in Australia and New Zealand, claiming about 25% of the latter market. According to InvoCare’s website, the company currently operates over 300 funeral locations, 17 cemeteries, and 29 crematoria with “around 1,855” employees. Through its many brands, which include White Lady Funerals, George Hartnett Metropolitan, Lester and Son, Galaxy Funerals, Le Pine, Simplicity Funerals, and Blackwell Funerals, InvoCare reportedly conducted 40,000 funerals and 26,000 cremations and burials in Australia in 2022.
Additionally, InvoCare’s growing pet cremation business provided services for 99,000 clients, netting EBITDA earnings of $7.1 million last year.
Despite the number of excess COVID- and flu-related deaths of the past several years, InvoCare has seen its share price drop recently due to inflation, worker shortages, and other factors. Several financial analysts believe this slide was the catalyst for TPG’s unexpected offer; a few have even mentioned that the offer price is unfairly low.
Meet TPG
Founded in San Francisco in 1992, TPG Capital is a “leading global alternative asset manager” with $135 billion in assets under its management. Its diverse portfolio is currently composed of more than 280 active companies headquartered in more than 30 countries, including such well-recognized brands as AirBnB, Burger King, Chobani, DirecTV, Fender, HotWire, Lenovo, McAfee, Neiman-Marcus, Norwegian Cruise Line, Petco, Spotify, and Uber.
Although TPG has acquired several healthcare-adjacent companies specializing in drug testing, veterinary services, and non-prescription drug production, InvoCare would be the company’s first investment in the deathcare space.
According to one report, if InvoCare and TPG arrive at a mutually acceptable purchase agreement, TPG would like to focus on “included operational improvement, property, the capital spending profile, prepaid funeral funds under management, and gearing ratios.”
