Service Corporation International (SCI) conducted their 2nd Quarter 2025 Earnings Call where they answered questions from investment experts about two weeks ago.  You can access a copy of the transcript here.

During the Question and Answer session of that call SCI’s Executive Vice-President and CFO Eric Tansberger responded to a question about cash-flows and capital deployment with this answer:

“I mean we’re going to invest capital to the highest return. Certainly, we’ve done a lot in shares the first half of the year. I think you’ll see some momentum there that will continue at least the shares at this level. But the M&A program is going strong. I know someone commented that we spent $30 million year-to-date and the guidance is $75 million to $125 million in terms of investment. I think we’ll get there. I feel really good about the pipeline.

Some of the deals, I mean, if we just get through our LOIs alone right now, we’d be into that guidance, frankly, and there’s a lot more that we’re out there discussing. So I think we’ll get into that 75 — I think that’s a good guidance number for investment for M&A. Would we do more? Absolutely. The other thing that you have to remember, though, is — are the greenfield investments that we’re making, the new funeral homes and sometimes new cemeteries. This is a nice robust program, which we’ve told you — this year alone, we’re going to spend probably about $70 million on that. Could that go up? It’s possible, but it takes time. That’s a 3-year cycle. At any point in time, we have 30 to 35 projects that are in the pipeline. About 1/3 of those turn every year. And that’s at a more better velocity than what we’ve had in the past, but we’re excited about that.

M&A has its benefits because you get EBITDA and cash flow right away, but so do these construction projects have these benefits where you can build exactly where you want and exactly what you want, especially having a modern celebration of life venue when we design these brand-new funeral homes. So there’s a lot of opportunities out there, but they’re not different than what we have talked about in the past, and we’ll continue to invest as we can in both of those programs as well as the share repurchase program.”

 

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  I think that this is a very appropriate and interesting answer.  A lot of people in the Death Care business think all that SCI does is go out and buy funeral homes.  But, there responsibility is not necessarily to simply go out and buy funeral homes.  Shareholders want financial returns and Tanzberger lets one know with his comments that the company has multiple options to bring excellent financial returns to its shareholders.

Yes, there are funeral homes to be acquired that can immediately add to the operating EBITDA.  But there are also share buybacks which he indicates that SCI has “done a lot“.

The most interesting thing he says in his answer, in my opinon, is his talk of “greenfield investments”.  Tanzberger goes on to say about these greenfield investments, “. . .these construction projects have these benefits where you can build exactly where you want and exactly what you want, especially having a modern celebration of life venue when we design these brand-new funeral homes”.

I think that the answer also represents a realization  that Death Care has made some changes and things, in an overall scheme are becoming different than the way they have been in the past.   Building “exactly where you want and exactly what you want” is somewhat of a change in original modus operandi for SCI over their tried-and-true acquisition method.

I think SCI’s open-ness about building these new facilities that are designed for today’s consumer might tell some existing funeral homes that they are either outdated in client amenities or the demographic numbers of their current neighborhoods may not be as profitable as they once were.

Again, Tanzberger’s answer makes this statement about the new facility and cemetery program, “This is a nice robust program, which we’ve told you — this year alone, we’re going to spend probably about $70 million on that.”  

In the same answer he says this about SCI’s acquisition program, “So I think we’ll get into that 75 (million) — I think that’s a good guidance number for investment for M&A.”

I’m just going off the top of my head here. . . .but when is the last time SCI spent as much on building new as they did on acquisitions?

Obviously, there is a “proposition value” to what SCI eventually decides to do. . . . Has the “propsition value” changed over the years between aquisitions and building new “where and what you want”?  SCI might know more than many of us about facilities, traditions, and trends. . . . and, as Tanzberg states, “I mean we’re going to invest capital to the highest return”.

Disclaimer — The author of this article for Funeral Director Daily is a Service Corporation International shareholder.

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“A servant’s attitude guided by Christ leads to a significant life”

Serent Capital Invests in PlotBox to Accelerate Innovation in Deathcare Technology

Austin, TX & San Francisco, CA – Serent Capital, a growth-focused private equity firm, announced today that it has made a strategic investment in PlotBox, a leading cloud-based provider of end-to-end cemetery, crematory, and funeral home management solutions. The partnership will help to fuel PlotBox’s expansion, drive continued innovation, and enhance customer outcomes across North America, the UK, Ireland, and APAC.

Founded by Chief Executive Officer Sean McAllister and Chief Commercial Officer Leona McAllister, PlotBox has revolutionized the deathcare industry with its innovative, cloud-based platform that streamlines cemetery, crematory, and funeral home operations.

Serent’s investment is expected to help accelerate product innovation, elevate customer support, and expand PlotBox’s global footprint – fueling growth while continuing to serve and support long-standing customers.

“We are excited to partner with Serent Capital as we embark on this next stage of growth,” said Sean McAllister, CEO of PlotBox.

“We wanted a partner whose values aligned with our own, helping to support our mission to help take away some of the pain in dealing with death for families and those that serve them. We’re focused on bettering the industry by raising standards within the profession, and this partnership will help us to realize that.”

“Their expertise in scaling vertical software companies, along with their deep understanding of our industry, also makes them the perfect partner to help us continue to deliver exceptional value to our customers.”

Leona McAllister, Chief Commercial Officer of PlotBox, added, “At PlotBox, our customers are at the heart of everything we do. With Serent’s support, we will be able to further enhance our platform and continue providing best-in-class service to cemetery, crematory, and funeral home operators worldwide.”

Serent Capital, which specializes in investing in high-growth technology companies, saw PlotBox as a natural fit.

“PlotBox has established itself as the premier platform in the deathcare market, offering a comprehensive and highly differentiated product,” said Lance Fenton, Partner at Serent Capital.

“We are thrilled to support their vision and help drive the company’s growth across the entirety of the deathcare industry.”

PlotBox’s innovative platform integrates digital mapping, records management, financial management, and operational workflows, providing cemeteries, crematories, and funeral homes with a modern, efficient solution to manage their operations.

The investment also follows strategic partnerships PlotBox has secured with some of the largest consolidators in the United States. It underscores PlotBox’s ability to serve sophisticated, large-scale operators while demonstrating the scalability needed to support the complex needs of multi-location providers of all sizes.

Serent’s investment marks a major step forward in PlotBox’s mission to bring cutting-edge technology to the global deathcare industry.

About PlotBox

PlotBox is the innovative cloud-based deathcare management solution that helps cemeteries, crematories, and funeral homes to excel. The intuitive, easy-to-use platform seamlessly places all essential deathcare management functions into one place. This enables customers to serve better, save time, increase revenue, reduce risk – and sustain long-term growth. The 120-strong company is headquartered in Northern Ireland, with on-the-ground teams in the United States and Australia. This means the growing multidisciplinary team can consistently deliver exceptional levels of service, both globally and locally. PlotBox is more than a vendor. They are a dedicated partner focused on each customer’s success – and the families they serve.

For more information, visit www.plotbox.com.

About Serent Capital

Serent Capital is a growth-focused private equity firm investing in capital-efficient B2B SaaS and technology companies. Since its inception, Serent set out to build a distinctly different firm that prioritizes founders and their companies, providing true hands-on resources through its 25+ person Growth Team. Serent’s in-house Growth Team is equipped with a wide range of resources to help companies accelerate growth, including strategic and operational support to drive revenue generation, assistance in building a top-tier executive team, guidance for transformative M&A, and a community of 400+ founders and operating executives. With $5 billion of assets under management, the firm has partnered with over 60 founder-led, industry-changing companies and offers unparalleled hands-on operational support.

Discover how Serent Capital is fueling the growth of innovative companies across a range of industries at www.serentcapital.com