Park Lawn announces US $58.5M acquisition and $60M bought deal

pcNewsWirePark Lawn Corporation (TSX: PLC) has agreed to acquire Saber Management, LLC for US $48.75 million in cash, plus additional consideration of up US $9.75 million in PLC common shares.

The company has entered into an agreement with National Bank Financial Inc. for a bought deal of CDN $60 million of common shares to partially finance the acquisition.

News Release

Park Lawn Corporation Agrees to Acquire Saber Management and Announces C$60 Million Bought Deal Offering

Acquisition adds 19 cemeteries and 4 funeral homes in Kentucky, Illinois and Texas and further expands operations in the United States


TORONTO, ONTARIO, June 7, 2017 – Park Lawn Corporation (TSX:PLC) (“PLC” or the “Company”) is pleased to announce that it has entered into a definitive agreement to acquire (the “Acquisition”) all of the outstanding membership interests of Saber Management, LLC (“Saber”) for a purchase price of approximately US$48.75 million in cash, subject to customary working capital adjustments, plus additional consideration of up US$9.75 million in PLC common shares (“Common Shares”). The additional consideration will be held in escrow and be released over a period of three years if certain financial hurdles are met.

In conjunction with the Acquisition, the Company also announced that it has entered into an agreement with National Bank Financial Inc., on behalf of a syndicate of underwriters (the “Underwriters”), to issue, on a bought deal basis, approximately C$60 million of Common Shares to partially finance the Acquisition (the “Offering”).

“The acquisition of Saber presents an exciting opportunity for Park Lawn,” said Andrew Clark, Chairman and Chief Executive Officer of the PLC. “The Acquisition is in line with our communicated growth strategy and significantly increases our footprint and presence in the U.S. market.”
“Saber Management is very proud to become part of the Park Lawn family. The leadership of our company views this as an opportunity to match our sales and marketing skills with the disciplined growth of Park Lawn,” said David Sullivan, Chief Executive Officer of Saber. “The blending of our two companies will give our employees a great opportunity and Park Lawn a competitive edge in the market place. We are very enthused about the future.”

Completion of the Acquisition, which is expected to occur on or about September 30, 2017, is subject to the satisfaction or waiver of certain closing conditions, including, among other things, third party consents and approvals.

Acquisition Highlights

• Continues to accelerate PLC’s growth strategy, while increasing its scale in the U.S. market.
• Significantly increases PLC’s revenue, while providing a business platform with strong operating margins. In the first full year of operations following closing, PLC management expects Saber to generate approximately US$21 million of revenue and US$5.3 million in EBITDA.
• If Saber achieves the financial hurdles necessary for the payment of the additional consideration, the purchase price multiple will be approximately 8.5x Saber’s EBITDA.
• Significantly increases the number of cemeteries in the Company’s portfolio, adds funeral home assets into the U.S. operations and geographically diversifies the Company’s U.S. operations.
• Going forward, Saber’s experienced management will join the Company’s existing U.S. management team, which will help the Company further execute its growth strategy.
• Expected to be immediately accretive to adjusted cash flow, as well PLC expects to leverage its operational expertise in integrating Saber’s assets to realize cost synergies.

Description of Saber Management

Saber currently owns and operates 19 cemeteries and 4 funeral homes in Kentucky, Illinois and Texas. Today, Saber is a recognized leader in the death care industry in Kentucky, providing approximately 10% of the burials for the state. Saber was established in 1998 by Mr. David Sullivan (CEO and majority owner of Saber), who brings more than 40 years of industry experience with him. The day to day operations, sales and marketing efforts at Saber’s locations will continue to be actively managed by Saber’s existing team.

Common Share Offering

The Company has reached an agreement with National Bank Financial Inc., on behalf of the Underwriters, to issue 3,158,000 Common Shares at a price of C$19.00 per Common Share, on a bought deal basis, for gross proceeds of approximately C$60 million. The Company has also granted the Underwriters an option to purchase up to an additional 473,700 Common Shares on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of the Offering (the “Over-Allotment Option”).

The net proceeds from the sale of the Common Shares will be used to partially fund the cash portion of the Acquisition.

The Company expects to file a preliminary short form prospectus relating to the Offering on June 13, 2017 and closing of the Offering is expected to occur on or about June 27, 2017. The Offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange. The Common Shares will be offered in each of the provinces of Canada, and if offered in the United States, by way of private placement in accordance with applicable registration exemptions.

About Park Lawn Corporation

Park Lawn Corporation provides goods and services associated with the disposition and memorialization of human remains. Products and services are sold on a pre-planned basis (pre-need) or at the time of a death (at-need). Park Lawn Corporation and its subsidiaries own and operate 65 businesses including cemeteries, crematoria, funeral homes, chapels, planning offices and a transfer service. Park Lawn Corporation operates in Ontario, Quebec, Manitoba, Saskatchewan, British Columbia and Michigan.

Contact Information
Andrew Clark
Chairman & Chief Executive Officer
(416) 231-1462

Joseph Leeder
Chief Financial Officer & Director
(416) 231-1462

Suzanne Cowan
VP, Business Development & Corporate Affairs
(416) 231- 1462