It’s been predicted that the next couple of years could see massive ownership changes in the business of funeral homes.  While the public companies in the business generally let us know of their acquisitions via press releases and quarterly earnings reports it is a little harder to get an idea on what is happening in the private funeral home ownership sector.

However, at Funeral Director Daily we scour newspaper reports on a daily basis in North America for changes in funeral home ownership.  We find a lot of announced ownership changes. . . . there are a lot more than we can report simply because many times small local newspapers are now putting pay walls up and we don’t feel right about linking articles with pay walls.

However, here’s just a few of the funeral homes that have been reported changing ownership in the past couple of months or so that don’t have pay walls to the articles.

California:  Debbie Plato takes full ownership of Callaghan Mortuary and Livermore Crematory:  Continuing a legacy of compassion and excellence.  Cision PR web

• Callaghan Mortuary-Livermore Crematory website

Ohio:  Talk about Clyde:  New Owners at Auxter Funeral Home.  Fremont News-Messneger (OH)

• Auxter-Recker Funeral Home website

Iowa:  Cranston Funeral Home in Fairfield acquires Gould Funeral Home.  Southeast Iowa Times (IA)

• Cranston Family Funeral Home website

Nebraska:  Marshall finishing 54 years in the mortuary business.  Gude Funeral Home to take over services.  News Channel Nebraska (IA)

• Gude Funeral Homes website

Iowa:  Nishna Valley Funeral and Cremation Services holds Sidney ribbon cutting, recognizes Marshall’s over 40 years of service.  NMA Land Radio (NE)

• Nishna Valley Funeral and Cremation Services website

Texas:  Broussard’s Mortuary has new owners.  Beaumont Enterprise (TX)

• Broussard’s Mortuary website

Connecticut:  Two Naugatuck funeral homes merge leaving only one other in borough.  CT Post (CT)

• Buckmiller Ford Mengacci Funeral Home website 

Pennsylvania:  2 companies partner to purchase central PA funeral home.  Penn Live Patriot News (PA)

• Snyder Bean Funeral Home website

. . . and here’s an interesting expansion in the state of Ohio:

Local family funeral home expanding.  WKBN Vienna News (OH)

• Stewart-Kyle Funeral Home website

More news from the world of Death Care:

• Taking after-death planning out of the unknown:  Know your options.  Seattle Times (WA)
• Can you legally be composted after death in Louisiana?  Here’s what the law says.  KPEL Radio (LA)
• Forest Lawn unveils Legacy Mausoleum among rising burial demand.  Video news story and print article.  WGRZ NBX Channel 2 – Buffalo (NY)
• UC professor advocates for equal death care.  WYSO Ideastream Public Media (OH)

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Funeral Director Daily does a good job of notifying our readers when the large corporate companies acquire new funeral homes.  It appears that these transacations are a consistent regular occurrence, although there are some ebbs and flows to the pipeline of deals.  We also know that large corporate consolidators and their purchases are not the only place that acquisitions and mergers are taking place in the funeral home space.

When I peruse the internet for articles that would interest Funeral Director Daily readers I notice mergers, acquisitions, and bolt-on purchases for hub and spoke firms happening often.  There is a lot of that happening around the United States in our profession.  It is just not something that we bring to our readers every day because the interest in the individual transactions is truly local and maybe regional in scope, but not national news in our profession.

What is “National” in scope about these transactions is that they are happening.  It’s been said for a long time in our business that there will be a large amount of funeral home owners wanting to retire with no family interested in following in their footsteps as the world of funeral home ownership changes.. . . . . . .From what I read and hear, I think that time is upon us.

Here are a couple of articles that I recently came upon that show some of the different types of transactions that are going on. . .

Funeral Director Daily take:  Charles Dickens wrote his classic “A Tale of Two Cities” in 1859. . . that’s a long time ago.  However, I think about that story when I read about funeral homes being bought and sold.  You see, I think the “Tale or story of your funeral home” might be the deciding factor in who will acquire it if you decide to sell and retire.

Tom Anderson
Funeral Director Daily

What matters to the different potential buyers is if you are located in a metropolitan city, or a suburban city, or a growing regional center. . . . or are you in a small isolated community with not much growth potential?  Wherever your funeral home is located the case can be made that when put it up for sale you will, more than likely be a target for some company. . . . but the tale, or story, of your funeral home will determine who that company is.

Metropolitan, suburban and regional center funeral homes in growing areas probably have great value and bring in multiple offers, but a single funeral home in a one fuenral home community that is holding its own with population stability will, more than likely, have some value to a neighboring community funeral home as well.

It appears to me that the companies that operate as “multiple funeral home” owners are continuously looking for more locations to ramp their economies of scale.  Every owner wants, for eonomies of scale, to have a situation where their case load per director is growing. . . And, I think as preneed sales become increasingly more important to funeral homes that will move firms to grow even faster to ramp up their numbers.

However, on the other hand, I’ve noticed some operators stop acquisitions for acquisitions sake. . . .These type of operators are making sure that each and every location that they purchase can carry profitability on its own.  That’s important too. . . especially as fixed costs are rising and one does not want to get caught with a business with high fixed-costs where the average retail sale is going down — especially if the business is not adding volume.

Anyway, I’m seeing businesses change hands.  And, the transactions are probably more complicated than they were ten years ago.   What’s at stake — especially if one makes a purchase mistake — is also larger and could be business and life altering if going-forward assumptions are wrong.  If I was looking to buy or sell I’d make sure that I had an expert such as Johnson Consulting Group in my corner.  They should be your first call when looking to expand or retire.

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

Back in 2017 when I served on the board of the University of Minnesota I had a hand in the hiring of new Head Football Coach P.J. Fleck.  Coach Fleck is still there and has had some success coaching in the Big Ten.  Outside of the improvement of our team, I have come to really believe in his philosophy of building young men into men of character — on and off the football field.

Coach Fleck has a unique way of going about instilling his culture and beliefs into the football team philosophy and one of his takes is that there is a big difference between “Failing” and “Failure”.  Here is a short 90-second video of his take on that.

It’s with that background that I looked at the 4th Quarter and Year End 2023 discussions by Carriage Services and Park Lawn Corporation in their respective earnings report and earnings call.

Tom Anderson
Funeral Director Daily

If you remember, it was made known that Park Lawn Corporation, on about June 13, 2023, made a bid to acquire Carriage Services for a reported $34 per share.  Carriage Services then announced that they would take a “Strategic Review” of their operation and other opportunities that they may have for their shareholders before announcing a decision.  Here is a Funeral Director Daily article on the original offer.

Then, on October 2, 2023, Park Lawn Corporation, in this press release, “announced that it has declined to participate further in Carriage Services, Inc.’s previously announced strategic review process and that it has withdrawn its all cash proposal to purchase the outstanding stock of Carriage”.

I thought of Coach Fleck last week in reading the Park Lawn Corporation Earnings Call transcript.  It came to my mind, that for whatever reasons the announced acquisition was never consummated, but it appears that the process of the potential of it happening may have turned out to be a positive for both companies.

Here’s what Carriage Services said in its press release of its Year-End Financial report:

“The Board of Directors (the “Board”) has concluded the Company’s strategic review process, first announced on June 29, 2023, which was overseen by the Board with assistance from experienced financial and legal advisors. The Board has unanimously determined that continuing to execute on the Company’s strategic plan as an independent, public company is in the best interests of the Company and its stockholders at this time. In this regard, the Board’s determination took into account positive trends described above in the Company’s financial and operating results toward the end of 2023. The Board remains committed to maximizing stockholder value.

While the Company received a number of proposals for transactions involving the Company in the course of the strategic review process, following a thorough review and evaluation of the proposals and alternatives available to the Company, the Board concluded that none of those proposals would be in the best interests of the Company’s stockholders. The Board endorsed the Company’s continued execution of its standalone business plans as an independent publicly held company under the leadership of Carlos Quezada as CEO, Steve Metzger as President and Kian Granmayeh as CFO, as well as leadership from the Company’s Board, which added three talented new directors during the summer of 2023″.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

And, here is how Park Lawn Corporation’s CEO J. Bradley Green summed up the process that his team went through in response to a question in last week’s Earnings Call:

. . It was this management team’s first opportunity to go through something like that and I would consider myself taking out the mix. It’s a fairly young management team. . . . When you go through a process like that with the banks, and especially with someone that’s a sophisticated partner like Brookfield, you get asked a lot of questions about a lot of things that you’re doing that makes you reflect upon whether or not you’re doing them the right way, whether you can approve on.

So we took that extensive process and we said, well, those are interesting questions and our answers are interesting. And maybe we can improve and improve here and improve there. It actually made its way that line of thinking made its way into our strategic presentation, the board where we were able to actually point out things where we could be better just based on the questions we were asked going through that process“.

So, from my point of view using the perspective of Coach Fleck, there was a “failing” of making a deal, but it certainly looks like there was no “failure” in that each company learned something about themselves that will, in the long run, probably make the companies more successful in their own right.  I think that is a “win” for both companies.

I also think it is a win for Death Care, funeral services, potential independent funeral home sellers, and the consumer public in general.  Competition is good — not only for consumers, but for competing funeral establishments.  It’s the American way and the competition should make each competitor sharpen their offerings to the public.

Having a lot of competition — whether it is Carriage Services, Park Lawn, Arbor Memorial, Service Corporation International, Legacy Funeral Group, Northstar Memorial Group, Newcomer Funeral Service Group, Foundation Partners Group or any other operator including all the regional and single facility independent operators– keeps everyone sharp.

And my guess is also that Park Lawn Corporation and Carriage Services learned a lot about themselves by taking a long, hard look at if this union would be good for them. . . or they were better going it alone.  My father used to say, “In life, some of the things you choose not to do turn out to be more important in your life than some things you choose to do”.  Thinking about my father’s advice, I think both companies made the right decision.

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