LM Funerals passes over to Duke Street consortium

WOLVERHAMPTON-based LM Funerals has been bought by a group of private equity firms from existing owner Sovereign Capital.

A consortium led by mid-market private equity group Duke Street and including Babson Capital Europe and Metric Capital Partners bought the firm for an undisclosed sum.

LM Funerals is the number four player in the UK market and has more than 60 branches concentrated in the Midlands and the South East. The company has grown by both acquisition and organic rollout since its inception.

Typically each acquired business has continued to trade under its original name post-acquisition and the original owners often also remain involved. This strategy  has ensured the preservation of trusted local reputations and relationships that have been built over a sustained period. 

With more than 60% of the £1.5bn funeral services market run by 2,500 independent operators, investors believe there is still significant room for further consolidation and that LM Funerals is well placed to continue to be an active acquirer.

The management team, who will be significant shareholders in the business, is led  by chief executive Deborah Kemp. Duke Street operating partner Johanna Waterous will join the LM Funerals board as non-executive chairman. 

Kemp said: “We are delighted to be entering the next phase of our strategic growth plan in partnership with Duke Street , who have demonstrated a track record of investing in and growing more than 40 mid-cap businesses over the last 20 years.

“Their customer driven and progressive approach to developing businesses in conjunction with management teams fits well with our values and aspirations for the future.”

Financing for the acquisition was provided by HSBC, RBS, Babson Capital Europe, Metric Capital Partners and Alcentra.