Foundation Partners Group announces new ownership

Orlando, Florida, based Foundation Partners Group (FPG) caught some by surprise when it announced in a news release on Monday,  “a transformational milestone in its growth journey, including new ownership, increased investment in its people and facilities, and a strategic reorganization to strengthen field operations and support care teams.”

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The news release did not disclose the name or names of the new owners.

You can read the entire press release from Foundation Partners Group here

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Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  As sometimes happens, I started getting phone calls last week wondering if I knew about anything happening at Foundation Partners Group.  One caller told me that he knew of several employee changes or loss of positions.  Another caller told me that Access Holdings, an institutional owner/investor for some time no longer had the company listed among its current portfolio of investments on their website.  Another caller wondered if I thought they would be putting some of their brands up for sale.

I made a couple of phone calls and learned that there would probably be an announcement of some sort soon.

From my point of view, Foundation Partners Group has, at least since Access Holdings became involved, been an experiment on the feasability of high propensity cremation businesses being able to follow the successful path of building a national organization through acquisition much like Robert Waltrip pioneered with Service Corporation International (SCI) and traditional funeral homes back in the 1960’s.  Waltrip’s method has proved a successful modus operandi, not only for SCI, but for other national, regional, and local funeral home consolidators who have emulated the recipe for over half a century.

The jury may still be out on the question of building a profitable consolidated national company based on high cremation percentage businesses.  It will be very interesting to see what path FPG takes from here on.

While I have no insight into the profitability or non-profitability of the company the CEO John Smith is quoted, “This is a vote of confidence in our team, our strategy and our future.  Our investors believe in what we’re building—and their investment gives us financial flexibility to grow, improve facilities and invest in our people.” 

Again, from my point of view, the difference that I see between the traditional funeral home consolidators and what Foundation Partners Group has done with a cremation-heavy business is that the historical financial margins for traditional funeral homes were enough to allow for acquisition payments as well as the build-out the supporting network of “corporate” employees and management.

The question that I have is “Is that service margin enough to do the same roll-up and build-out with a cremation-centric national company”?  I’ve always believed that the margin may be there for  an online Direct Cremation “only” business, but not necessarily with a more costly bricks-and-mortar “cremation-centric” operation.

Time will tell and time will tell on the next moves of Foundation Partners Group.

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