Funeral director Dignity announces £43m expansion deal

SUTTON Coldfield-based Dignity, the UK’s only listed funeral services business, has expanded its UK network of crematoria in a £43m acquisition.

Dignity has signed a conditional sale and purchase agreement to acquire five crematoria currently operated by Funeral Services Ltd (trading as Co-op Funeralcare). The deal will be settled in cash upon completion.

The crematoria are situated in areas not currently served by Dignity. Of the facilities acquired, three are freehold and based in Glasgow, Sheffield and Lichfield, with the other two leased from and managed on behalf of local authorities in Shropshire and Stockport.

Dignity said the deal for the freehold locations was conditional upon the transfer of trade and assets of the relevant locations to a new entity, which is expected to complete on or around July 5, 2016.

Acquisition of the leasehold locations is conditional upon consent of the relevant councils, together with the transfer of the trade and assets of the location to a new entity. Consequently, one leasehold location is anticipated to complete on or around July 25, with the other following a week later.

The acquisitions are being funded from Dignity’s own cash resources.

The locations being acquired generated earnings before deducting interest, taxation, depreciation and amortisation of £2.9m for the year ended January 3, 2016. The unaudited gross assets of the locations being acquired as of the same date was approximately £10.9m.

Mike McCollum, chief executive of Dignity, said: “This acquisition will allow us to extend our crematoria network into new geographical areas. It represents a good investment for Dignity, using cash already held by the group, and supports our continued growth.”
 
Dignity currently operates 39 crematoria throughout the UK. Since flotation, the group has successfully acquired and integrated several other crematoria locations.