HSBC Private Equity is the equity sponsor in the management buyout of Dignity Caring, the UK funeral services and cemetery company.
In a £220m transaction, HSBC has acquired an 65 per cent stake in Dignity, with former controlling shareholder Service Corporation International, the global death services provider, retaining a 20 per cent interest. A management team led by Peter Hindley, chief executive, hold a 15 per cent stake.
Dignity, which in 2001 had revenues of around £115m, sold at 8x adjusted EBITDA. Service Corporation is understood to have sold the company for less than half of what it paid when it acquired it in 1994.
Service Corporation is currently selling parts of its international holdings in a bid to pay off debt and stabilise its share price. In October 2001, it sold a business in Belgium to Waterland Private Equity Investments, a firm specialising in the senior citizen sector.
Dignity has a 12.5 per cent share of the fragmented UK market and is looking to grow predominantly by acquisition over the next five years.
The company's management was advised by KPMG and Eversheds. HSBC Private Equity consulted with lawyers DLA, while the vendor was advised by Linklaters.