Regulator clears ASX-listed InvoCare unit to buy Christchurch crematorium
By Suze Metherell
July 25 (BusinessDesk) - The Commerce Commission has cleared the way for ASX-listed InvoCare's Bledisloe New Zealand to buy the 70-year old Cremation Society of Canterbury adding two crematoriums to its New Zealand network.
The local arm of Australia's largest undertaker sought the regulator's approval to buy the company that owns Harewood Memorial Gardens & Crematorium and Woodlawn Memorial Gardens and Crematorium in Christchurch. The commission found that there would be no lessening of competition in the Canterbury funeral market, where Auckland-based Bledisloe already owns three Christchurch funeral parlours and a headstone maker but previously had no capacity to cremate bodies in the city.
"The merged firm will continue to face competition from a number of existing funeral directors and providers of cremation services in Christchurch as well as a large number of memorial marker suppliers around the country," commission chairman Mark Berry said in a statement. "We are therefore satisfied that there is unlikely to be a substantial lessening of competition in these markets."
InvoCare set up its New Zealand subsidiary in 2007 and bought Bledisloe in 2010 for an enterprise value of A$114 million. The group has been expanding its New Zealand holdings, acquiring four funeral parlours last year, bringing its total to 30 businesses across the country.
In 2013, the Australian company's New Zealand sales were A$32 million with earnings before interest, tax, depreciation and amortisation of A$6.2 million, and estimated a 1.9 percent decline in deaths during 2013, according to InvoCare’s annual report.
The Cremation Society was ultimately owned by Clenn Stapley, a Queensland-based accountant, the commission said.
InvoCare's shares rose 0.5 percent to A$$10.47 on the ASX yesterday, and have declined 5.2 percent this year.