Australian funeral services provider Propel Funeral Partners Ltd. said Oct. 18 that it agreed to acquire its New Zealand peer, Graham's Funeral Services, in a cash-and-stock transaction.
Propel will pay about NZ$7.3 million and issue 227,510 ordinary shares at A$3.07 per share, or nearly A$700,000, to Graham's. The stock issuance will be subject to escrow arrangements for three years.
Additionally, Propel will also pay NZ$500,000 in cash to Graham's if certain financial milestones are achieved during the three years following the completion of the proposed deal.
Propel said it will fund the deal from its existing debt facilities.
Graham's, which was established in New Zealand in 1935, holds about 350 funerals per year. In its fiscal year ended March 31, Graham's generated about NZ$2.7 million in revenue.
Under the transaction, Propel will take over Graham's funeral homes in Tuakau and Waiuku, both on the North Island of New Zealand. Propel will also acquire Graham's chapel, hall and residential property in Pukekohe, as well as a residential property and vacant land in Tuakau.
Propel, which operates in Australia and New Zealand, said the deal is expected to raise the company's annual revenue by about 2.1%. The transaction is expected to be completed in the second quarter of 2020, subject to certain conditions including due diligence.
Propel's stock is 0.32% higher at A$3.10 in early afternoon trading in Australia.
As of Oct. 17, US$1 was equivalent to NZ$1.58.