NFDA News

DES MOINES, IOWA – Homesteaders Life Company has teamed with Birch Hill Equity Investors in facilitating a $1.2 billion deal (Canadian dollars) to transition Park Lawn Corporation to private ownership. 

Homesteaders, Viridian Acquisition Inc. (an affiliate of Homesteaders) and Birch Hill Equity Partners Management Inc. will acquire Park Lawn for a price of $26.50 per share in an all-cash transaction valued at approximately $1.2 billion – including Park Lawn’s net debt.

The next step is a formal process dictated by the Canadian Securities Administration. 

The June 3 signing follows approval of the plan by Park Lawn’s Board of Directors and their unanimous recommendation that stakeholders vote to approve the transaction.  Park Lawn provided notice of the proposed transaction to shareholders earlier today, paving the way for a vote to approve later this summer. 

“I’m very excited to bring this transaction forward to our shareholders with the full support of both our executive leadership team and the Board of Directors,” said Brad Green, CEO of Park Lawn. “I’m confident that Birch Hill and Homesteaders are the right partners as our business enters this next phase.”

“This Transaction represents tangible recognition of the value and strength of our organization,” Green added. “We are proud of the accomplishments of our team and look forward to partnering with Homesteaders and Birch Hill in a new chapter of Park Lawn where we can continue to execute on our strategic initiatives for the benefit of our stakeholders in the long-term.”  

Discussions of the transactions began late last year when leaders from Homesteaders and Park Lawn met to discuss a potential equity investment. “We had been looking for creative ways to expand Homesteaders Funeral Home lending program to infuse capital under the profession of the time when it is difficult for operators to find reliable financial partners,” explained Steve Shaffer, president, CEO and Board Chair for Homesteaders. “And long-term equity investment in Park Lawn provides an avenue for us to leverage our considerable financial strength to benefit the profession as a whole.”

“It was immediately clear that our companies have shared have many shared values,” Green recalled. “Like Park Lawn, Homesteaders has been in the business for a long time and their commitment to the funeral profession is deeply embedded in their operations and culture. They also share our long-term view when it comes to an investment strategy, which makes them a very attractive partner for us.”

“Right away we discussed the challenges Park Lawn was having a gaining access to affordable capital,” Shaffer explained. “I knew Homesteaders was in a position to help both through its own equity investment and in finding a private backer like Birch Hill to help execute the capital transition. 

“We have confidence in Park Lawn and their team and believe that, in partnership with Birch Hill, we are well positioned to support them through this transition given our mutual commitment to the funeral and cemetery profession,” Shaffer said. “Homesteaders’ secure, stable financial position enables us to make long-term capital investments to support providers like Park Lawn while maintaining the financial strength that has made us a reliable partner for funeral providers and a safe funding vehicle for our policy owners for 118 years.”

Homesteaders worked with a third party to facilitate an introduction between Birch Hill and Park Lawn early in 2024, which served as a catalyst for months long period of due diligence and preparation for the post proposed transaction. 

Birch Hill is a Canadian mid-market private equity firm. Based in Toronto, Birch Hill currently has $5 billion in capital under management. Since 1994, the firm has made 71 investments, with 57 fully realized. Today, Birch Hill’s 14 partner companies collectively represent one of Canada’s largest corporate entities with over $9 billion in total revenue and more than 30,000 employees.

As for what this means for the day-to-day, Park Lawn will continue to maintain operational control at all its 282 cemetery, crematory and funeral home properties. Homesteaders is simply making a long-term investment to support Park Lawn in transitioning the company to private ownership.

A Conversation With Homesteaders’ Steve Shaffer and Park Lawn’s Brad Green

TORONTO, ONTARIO – Following the announcement of their blockbuster transaction, Brad Green, CEO of Park Lawn, Steve Shaffer, CEO, president and Board Chair of Homesteaders, answered questions about bringing these two companies together.

What prompted the idea of working together? 

Shaffer: I’d been having conversations with Chris Cruger at Foresight about creative ways to expand Homesteaders’ funeral home lending program to infuse capital into the profession at a time when it is difficult for operators to find reliable, long-term financing partners.

Green: At the same time, I was consulting with Chris on the strategic challenges Park Lawn was beginning to see, as a publicly traded growth-oriented organization, when the macroeconomic environment had shifted resulting in a much higher cost of capital.  

Shaffer: From these conversations, Chris suggested that Homesteaders and Park Lawn connect to see if there was an opportunity for us to work together in some capacity. Our teams met in late December, and it was immediately clear that our companies have many shared values, including our overall commitment to the funeral and cemetery profession and the customers and communities we serve as well as our long-term view on investment strategy. 

What was it about working together that was so attractive?

Green: Like Park Lawn, Homesteaders has been in the business for a long time. And, similar to Park Lawn, their philosophy in serving their customers is for the long-term; they do not take a view towards short-term results but, instead, make decisions for stability and longevity into the future.  This commitment to the profession is deeply embedded in their operations and culture which makes them a very attractive partner to Park Lawn.

Shaffer: Park Lawn’s values closely align with ours. They’re deeply committed to the profession. They have an experienced leadership team – one of the best in the business – and they take a long-term view of their operation, growth and investment strategies. Partnering with Park Lawn gives Homesteaders a way to support more families in facilitating and financing their end-of-life plans. It draws us closer to the funeral and cemetery profession at a time when many preneed carriers are shifting their focus to other lines of business, reinsuring their business, taking their investment strategies offshore or trading long-term growth for unsustainable commission payouts. Our focus has and will continue to be on long-term investments that benefit the profession for years to come. 

What was the primary driver of this arrangement for Park Lawn?

Green: Throughout the past year, we have been acutely focused on building out the infrastructure of Park Lawn to support the organization for the long-term as well as through the growth that we aspire to achieve.  You’ve heard me mention some of these things on our earnings calls like the implementation of FaCTS, our proprietary software system, a new operating model, refined sales structure, etc.  While we are proud of the hard work of our teams and have made immeasurable improvements to the organization that will be realized over the future, we have not been rewarded for this success in the capital markets in the near term.  It is this tension with short-term focus on immediate shareholder returns that has left our Board and leadership team feeling challenged.  In addition, we also started to experience some headwinds when it came to accessing new capital sufficient to support our growth opportunities over the next several years. By transitioning our capital structure to private ownership, we’re able to resolve those challenges, free up our time to focus on the parts of the business that truly make a difference for the families and communities we serve while also partnering with a company that shares our values, knows our business and has a strong commitment to the funeral profession. 

What was the primary driver of this arrangement for Homesteaders?

Shaffer: Homesteaders is always looking for ways to deepen our support for the profession. We know that it is a struggle for providers to find financing to help grow and expand their businesses. It was one of the primary drivers for the launch of our funeral home lending program in 2022, and we’ve been considering creative ways to continue to expand that program over the last couple of years. 

Homesteaders’ secure, stable financial position enables us to make long-term capital investments to support providers like Park Lawn while maintaining the financial strength that has made us a reliable partner for funeral homes and a safe funding vehicle for families for 118 years.

What do you see changing as a result of this partnership?

Green: Any time there is change within a company, you’re going to see some level of disruption, but we don’t expect significant changes to our business or how we operate. Our leadership team will remain in place and will continue to maintain operational control of all of our cemetery, crematory and funeral home operations. We, likewise, will continue with our strategic growth aspirations by adding premier businesses in strategic geographies.  This transaction simply provides us with access to ready capital which we can put to work immediately for the benefit of the profession and eliminates some of the significant time required to manage a public company capital structure. 

Shaffer: We don’t expect to see any significant changes on the Homesteaders side. Our company is built to scale, and we’re excited to partner with Park Lawn in ways that lead to better outcomes for families and providers. 

What challenges do you expect with this new partnership? 

Shaffer: One of the benefits of this partnership is the combined years of experience between Park Lawn and Homesteaders, and we expect that our long tenure will help us navigate any challenges that arise during the normal course of business. I have high confidence in the leadership at Park Lawn, as I know they have high confidence in the leadership at Homesteaders. The close alignment of our expertise and similarities between our cultures help make this partnership so attractive to both parties. 

Green: Not only are we excited to partner with Homesteaders from a cultural perspective, but we are also excited about the opportunities that we believe will result from this new model of collaboration in our profession.  Up until now, the largest consolidators operating in the space have been either publicly traded or managed by private equity investors who are focused principally on short-term quarterly results for their stakeholders. What we’re building through this partnership is unique, powerful and meant for the long-term which provides stability for all of our stakeholders including our employees, former owners and businesses as a whole. We’re looking at a large, reliable and privately owned funeral and cemetery company that is led by the best operating team in the profession and backed by long-term capital partners who understand the business and are deeply committed to the profession and families we serve. That is a game changer for the profession, especially for those funeral and cemetery providers who are looking to transition their business and need an experienced and knowledgeable partner to entrust with their life’s work. 

What’s next?

Green: With the full support of Park Lawn’s Board of Directors, the parties have entered into a formal agreement to document the proposed transaction. We are in the process of summarizing the details of the proposed transaction in a circular that will be distributed to our shareholders in the near term, followed by a formal vote to secure shareholder approval. Pending that approval, we anticipate the transaction will close in August.