Undertaker hits decade high on takeover deal

 
Michael Bow
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The UK’s only listed undertaker soared to its highest share price ever yesterday after unveiling plans to buy a northern funeral business.

Dignity, which famously buried Sir Winston Churchill, has agreed to buy privately owned business Yew Holdings for £58.3m, giving it 40 additional funeral parlours and two crematoria to add to its 600 locations and 37 crematoria across the UK.

Following the deal, the company’s share price spiked almost 2.5 per cent to its highest level since Dignity was listed in 2004.

Yew, which performed over 6,000 funerals and more than 2,500 cremations for the year ending July 2012, is a collection of independent funeral directors across Yorkshire and the north west of England.

The acquisition is intended to give Dignity a bigger footprint in the north.

The firm also plans to spend £2.5m modernising Yew’s current locations and increase the amount of money the firm can charge for each funeral.

Currently Yew gets £1,565 of income per funeral compared to Dignity’s £2,350. Despite this, Yew performs more funerals than Dignity at each location, with 155 funerals versus 104 funerals on average.

“[Yew] is one of the few remaining funeral assets of this size in the UK available to Dignity,” the firm said in a statement yesterday.

“The two crematoria are attractive, established assets. Privately owned crematoria are relatively rare as approximately 67 per cent of all crematoria in the UK are owned by local authorities.”

The deal is being financed through a new £24.2m share placing announced by Dignity yesterday, propped up by a £39.8m loan.

The placing is priced at £10.60 per share and was underwritten by Investec and Panmure Gordon. They will list on the London Stock Exchange on Friday.