Sovereign makes its third exit of the year with the sale of LM Funerals for £37.5m


Sovereign Capital, the UK private equity Buy & Build specialist, is pleased to announce the realisation of its investment in LM Funerals, one of the largest groups of funeral directors in the UK, through a sale to Duke Street for £37.5m.  The exit returns a multiple of 3.4x money invested.  This is Sovereign’s third exit this year following the sale of its two fostering investments.

Operating in the Midlands and South of England, in what is a highly fragmented market, LM Funerals was acquired by Sovereign in September 2003.  By deploying Sovereign’s strategy of Buy & Build, the business has been grown from 29 sites to 65 through nine acquisitions and new branch openings.  LM Funerals has successfully integrated as well as invested in its acquisitions, whilst respecting the names, traditions and heritages associated with individual sites, many of which have been serving their communities for several generations.

Sovereign appointed Deborah Kemp as Chief Executive, previously Chief Operating Officer of De Vere Hotels &

Resorts, in November 2010 to continue the Group’s expansion plans.  As part of these growth plans, LM Funerals has developed its own M&A team focused on further consolidating LM Funerals’ position and extending its geographic reach. 

Commenting on the transaction, Kevin Whittle, Partner at Sovereign said: “We are delighted with the Buy & Build growth that we have delivered alongside management at LM Funerals.  The strong cash flows associated with the predictability of the service provision in the funeral sector have made the business an excellent fit with Sovereign’s model and we are very pleased that our commitment to the Group has been rewarded with an excellent return to our investors.”

Deborah Kemp, Chief Executive, LM Funerals commented: “As an investor, Sovereign has been a highly supportive partner for LM throughout the duration of our relationship. The backing and guidance we have received has not only helped grow the business, but it has also enabled us to create a strong Buy & Build platform from which to develop and strengthen the business in what is

becoming an increasingly progressive and dynamic market”.

Deborah added: “We have high aspirations for the Group moving forward, and the robust footing we have developed in recent years means that our existing collective of funeral businesses, as well as new acquisitions, will be well served.”

LM Funerals is the sixth exit from Sovereign’s first fund (SCLP I) which, together with previous exits, has returned a combined multiple of 4.7x cost and an IRR of 62% (realised investments) to investors.

For further information please contact: Julie Sieger, Sovereign Capital, on +44 (0)20 7340 8800 or email:juliesieger@sovereigncapital.co.uk