Private equity firm TPG Capital's $1.8 billion buyout offer for InvoCare, Australia's largest funeral homes and crematoria operator, has garnered regulatory approval and the endorsement of an independent expert.
TPG takes over
The Overseas Investment Office in New Zealand has authorised TPG to take ownership of 50 locations operated by InvoCare in the country.
InvoCare, which oversees 282 locations in Australia and brands such as White Lady Funerals and Simplicity Funerals, is set to officially unveil a scheme booklet on Monday.
The booklet includes an assessment from independent expert Kroll Australia, stating that TPG’s $12.70 per share cash offer is "fair and reasonable". The offer price is slightly higher than an original $12.65 proposal made earlier, which had been rejected by the InvoCare board as too low.
Shareholders to vote
The Supreme Court in New South Wales approved a meeting on October 31 where InvoCare shareholders will vote on the deal. The board of directors has unanimously backed the TPG offer, provided no higher bid emerges.
Despite facing a decline in demand for funeral services and increased costs, particularly in wages, InvoCare's Simplicity Funerals brand has shown resilience.
InvoCare chief executive Olivier Chretien reported an 11% increase in case volumes for Simplicity in the first half of this year, even as the group’s overall case volumes in Australia declined by 3%.
The acquisition agreement includes an $18.3 million break fee, making it unlikely for any last-minute rival bids to emerge. TPG had already secured a 19.98% stake in InvoCare early in the negotiation process.
InvoCare is scheduled to be delisted from the ASX in mid-November, according to the current timetable.