TORONTO, ON / ACCESSWIRE / October 17, 2023 / Park Lawn Corporation (TSX:PLC, PLC.U) ("Park Lawn" or "PLC") announced today that it has entered into a definitive agreement to divest substantially all of the assets of The Park Lawn Cemetery Company (USA), Inc., PLC Saber Ltd. and PLC Citadel Ltd. to Everstory Acquisition Portfolio, LLC ("EAP"), an affiliate of Everstory Partners ("Everstory Partners"). Everstory Partners is a deathcare company that owns and operates cemetery, funeral and crematory locations throughout the United States and Puerto Rico. The divestiture includes 72 cemeteries in Kentucky, Michigan, North Carolina and South Carolina and 11 funeral homes in Kentucky and North Carolina. The transaction is valued at approximately US$70 million consisting of US$55 million in cash and the remaining US$15 million in deferred compensation, bearing interest at 10% per annum, to be received by PLC within 5 years following the closing of the transaction.

"This transaction represents the divestiture of a portfolio of legacy businesses which, by their nature, do not fit within Park Lawn's long-term growth strategy," said J. Bradley Green, Chief Executive Officer of PLC. Mr. Green continued, "The teams operating these businesses are completely aligned with our vision and mission, and they have been successful in maintaining a level of profitability consistent with the type, size and location of these businesses. Nonetheless, we determined that refining our portfolio in this manner will assist us in improving our margin mix to better align with our long-term strategy. Also, this will allow us to redeploy our capital resources to acquire businesses that offer stronger long-term profit potential. Park Lawn has identified a purchaser who can continue to support and grow these businesses outside of the pressures of the public markets."

The purchase price represents an approximate 8.0x Adjusted EBITDA multiple based on trailing twelve month results, however, Park Lawn expects the divestiture to be slightly dilutive to its adjusted earnings per share in the near term reflecting the foregone revenue related to the divested businesses and before factoring in any benefits from the redeployment of transaction proceeds.

In the near term, the cash portion of the proceeds is expected to reduce Park Lawn's leverage ratio to approximately 1.9x and 2.7x, including Park Lawn's outstanding debentures. Park Lawn anticipates replacing the divested earnings through the deployment of transaction proceeds into high-growth markets and new business opportunities which align with its long-term growth strategy.

Following the receipt of regulatory approval and the satisfaction of customary closing conditions for a transaction of this type, the transaction is anticipated to close prior to year-end 2023.

About Park Lawn Corporation:

PLC provides goods and services associated with the disposition and memorialization of human remains. Products and services are sold on a pre-planned basis (pre-need) or at the time of a death (at-need). PLC and its subsidiaries own and operate businesses including cemeteries, crematoria, funeral homes, chapels, planning offices and a transfer service. PLC operates in three Canadian provinces and nineteen U.S. states.

Cautionary Statement Regarding Forward-Looking Information

This news release contains forward-looking information (within the meaning of applicable securities laws) relating to the business of PLC and the environment in which it operates. Forward-looking statements in this news release are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate", "pro-forma" and other similar expressions. These statements are based on PLC's expectations, estimates, forecasts and projections and include, without limitation, statements regarding PLC's expectation that the divestiture will improve PLC's margin mix; that the divestiture will be slightly dilutive to its adjusted earnings per share in the near term; that the divestiture is aligned with PLC's long-term strategy; that PLC will be able to redeploy the capital received from the divestiture to acquire businesses that offer stronger long-term profit potential, that the cash portion of the divestiture proceeds will reduce Park Lawn's leverage ratio to approximately 1.9x and 2.7x including Park Lawn's outstanding debentures; and the expected time of closing of the divestiture. The forward-looking statements in this news release are based on certain assumptions, including that Everstory is able to obtain regulatory approval or satisfy regulatory requirements for the acquisition, the acquisition closes in the anticipated time frame, there will be no unexpected expenses occurring as a result of the divestiture, that overhead expenses will be reduced as a result of the divestiture, PLC will receive the deferred compensation within 5 years from the date of closing, as well as assumptions regarding present and future business strategies, organic growth initiatives, the environment in which PLC will operate in the future, expected revenues, expansion plans and PLC's ability to achieve its goals. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under the heading "Risk Factors" in PLC's most recent Annual Information Form and Management's Discussion and Analysis available at www.sedarplus.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, PLC assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact Information

Daniel Millett
Chief Financial Officer
(416) 231-1462, ext. 221

SOURCE: Park Lawn Corporation