Australian funeral chain eyes $200m float

By VICTORIA TAIT in Sydney

Australia's biggest funeral chain, Invocare, formerly known as Service Corp International Australia, is laying plans for a A$200 million ($230 million) initial public offering (IPO) in November.

"Certainly, a float is being considered of the order of A$200 million," an industry source said yesterday.

The source said the company, 80 per cent owned by private equity and other investors, was also in talks with several trade buyers, including an investment group in Australia.

"The working assumption is that an IPO is the more likely outcome," he said.

It would be among the first in a wave of floats expected to hit the Australian bourse as the country's six biggest private equity companies get set to return some investments to market.

Home entertainment retailer JB Hi-Fi said two weeks ago that it plans to raise up to A$134 million in an initial public offering and aims to list on the Australian Stock Exchange on October 23.

Car parts retailer Repco is eyeing a A$500 million IPO before the end of the calendar year, contributing to the US$6 billion in new equity which Asia-Pacific companies are expected to raise in the second half of 2003.

Boom Logistics, a crane hire and lifting services company, said yesterday that it had raised A$27 million in an oversubscribed initial public offering for its launch on the stock exchange.

Boom said its offering of 26.25 million new shares and 7.5 million existing shares, together representing 37 per cent of the expanded capital of the group, attracted strong interest from institutional and private investors.

It planned to buy five businesses across Australia which would boost its net profit in 2003/04 to A$8.9 million from A$2.6 million a year ago.

It expected to list on the ASX on October 14 with a market capitalisation of A$74 million, based on its issue price of 80Ac a share.

GoldLink Capital Asset Management said yesterday its IncomePlus investment unit planned a A$20 million equity raising and was also considering an exchange listing.

IncomePlus, which invests in gold and interest rate markets and has around A$21 million in net assets, said it was likely to release a prospectus at the end of the month if it decides to opt for a public listing.

"The major shareholders have supported a float of IncomePlus," said Richard Kovacs, executive chairman of IncomePlus.

"There are significant economies of scale which can be achieved through a bigger capital base."

Invocare is 20 per cent-owned by Texas-based Service Corp International, the world's largest funeral and cemetery company.

It is majority-owned by Macquarie Bank's private equity arm, Macquarie Direct Investments, after US-based SCI sold 80 per cent of its Australian business to a consortium led by Macquarie Direct. Other buyers included BancBoston Capital.

Invocare is the Australian market leader in funerals, conducting 21 per cent of the nation's services in its 138 funeral homes, and owns 15 cemeteries and crematoriums.

It has an annual turnover of A$500 million from its businesses, which include Simplicity Funerals, White Lady Funerals, a chain operated by women, and Kenyon Australia, the domestic arm of the Kenyon International Emergency Services disaster management.