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Nation's largest funeral home, cemetery companies to merge
Service Corp. International agreed to buy Stewart Enterprises Inc. in a cash transaction valued at about $1.4 billion that combines the nation's two largest funeral home and cemetery operators.
The acquisition occurs five years after an attempt by Service Corp. to take over its smaller rival was rejected.
Houston-based Service Corp. said Wednesday it will pay $13.25 for each share of Stewart. That's a 36 percent premium over Stewart's closing price on Tuesday.
Service Corp. said the combined company will operate 1,653 funeral homes and 515 cemeteries in the United States, Canada and Puerto Rico. Spokeswoman Lisa Marshall said that amounts to about a 13 percent market share in a highly fragmented industry.
Service Corp. runs 1,437 funeral homes and 374 cemeteries. Stewart Enterprises, founded in 1910, runs funeral homes in 24 states.
Stewart has no funeral homes or cemeteries in Western Pennsylvania, while Service Corp. owns eight funeral homes and a cemetery: Healy-Hahn Funeral Home, Millvale; Heard Funeral Home, Perry North; Ogrodnik-Hahn Funeral Home, Etna; Griffith Mortuary, Etna; Orion C. Pinkerton Funeral Home, Bellevue; H.P. Brandt Funeral Home, Ross; Saul-Gabauer Funeral Home, Rochester; Behm Funeral Home, Jefferson; and Sylvania Hills Memorial Park, Rochester.
The boards of directors for both companies approved the deal, which adds up to $1.4 billion when counting Stewart's debt, but Stewart shareholders still need to vote on it. The companies expect to close the acquisition by the end of the year or in early 2014.
Service Corp. said the combination will generate about $60 million in annual savings, which will be realized over a two-year period after the deal closes. Savings will come from reduced expenses, the elimination of a duplicate public company and increased purchasing power.
Service Corp. had tried and failed to buy Jefferson, La.-based Stewart Enterprises in 2008 for $11 a share. The latter company rejected the deal, and Service Corp. withdrew its offer when the two sides couldn't agree on financing and price.
The Associated Press, Bloomberg News and Trib Total Media staff writer Alex Nixon contributed to this report.
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