19 August 2019Acquisition of Gregson & Weight Funeral DirectorsPropel Funeral Partners Limited (ASX: PFP) (Propel) is pleased to announce it has executed a conditional sale agreement (andrelated documentation) to acquire the entire issued share capital of Codfern Pty. Ltd, trading as Gregson & Weight FuneralDirectors (Gregson & Weight), and certain freehold properties on the Sunshine Coast in Queensland.
The Gregson and Weight families’ involvement in funeral services dates back to 1897. Gregson & Weight itself was establishedin 1972, when the family relocated from Victoria to the Sunshine Coast. Today, Gregson & Weight employs circa 40 staff and isthe largest funeral services provider on the Sunshine Coast, performing approximately 1,650 funerals per annum from fourcontemporary locations.
The total purchase price payable on completion of the proposed transaction is approximately $36 million1, all of which will bepayable in cash. As part of the proposed transaction, Propel will acquire three substantial freehold properties and a parcel ofvacant land in the Sunshine Coast’s population centres of Caloundra, Nambour and Maroochydore.
The aggregate land sizeacross the three freehold properties and the vacant land is approximately 13 hectares, and the facilities include:– six chapels (the largest of which seats 400 people), each with large adjoining refreshment lounges and kitchen/servingfacilities;– two cremation facilities;– three mortuaries with cool rooms;– eight arranging rooms;– two onsite residential properties;– office, administration and staff facilities; and– expansive landscaped grounds, car parking and garage facilities.In addition, Propel will lease a full service funeral property in Noosaville, which includes:– a chapel (with seating for 300 people);– a third cremation facility;– a mortuary with cool room;– office, administration and staff facilities; and– landscaped grounds, car parking and garage facilities.Gregson & Weight’s revenue totalled approximately $12.0 million in FY19 and the proposed acquisition is expected to increasePropel’s annualised revenue2 by circa 11%. It has consistently generated attractive earnings margins and the proposedacquisition is expected to be earnings accretive in year one.
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