Yew Holdings bought by funeral group Dignity for £58m

DIGNITY, the UK’s only publically listed funeral group, has expanded its business with the acquisition of Yorkshire-based group Yew Holdings in a deal valued at more than £58m.

The acquisition, to be completed on a debt-free cash basis, comprises 40 funeral locations and two crematoria located in the north of England.

To part finance the move, the Dignity board has announced a new share placing, which aims to raise around  £24.2m before expenses.

This together with £39.8m of new debt will be used to fund the acquisition including approximately £2.5m of one off capital expenditure and all other transaction fees.

Yew, based in Beverley, is a funeral and crematoria business which operates in the north of England. In order to minimise any potential competition concerns, Dignity is not acquiring 20 funeral locations that have historically been operated by Yew. These locations, together with the existing head office function and a manufacturing business have been transferred from Yew prior to completion.

As part of the acquisition, Dignity will take over the administration of Yew’s 9,000 outstanding pre-arranged funeral plans, of which approximately two thirds are eventually planned to be performed by Dignity. Dignity also intends to sell its own pre-arranged funeral plans through the new Yew branches post completion.

The unaudited tangible gross assets of Yew as at July 31, 2012 were said to be approximately £24m.

Since flotation, Dignity has successfully acquired and integrated 93 funeral locations and 15 crematoria into the West Midlands-based group.

Dignity said there were significant opportunities to improve the financial performance of Yew’s funeral portfolio.  Yew achieved an average income per funeral of £1,565 in the 12 months to July 2012 compared to Dignity’s £2,350 in the year to December 2011.

Like Dignity, Yew trades under established local brand names such as Wetton Funeral Services and E Brigham Funeral Directors.

Mike McCollum, chief executive of Dignity, said: “The acquisition of Yew will increase our funeral presence in the north of England and further expand our crematoria portfolio. This is a quality business which will be an excellent addition to the Dignity group.”