A dignified buy-out
|Franklin: an expert on death
Taking the advice of Benjamin Franklin that "in this world nothing can be said to be certain, except death and taxes" CIBC has latched on to a new source of stable cashflow - funeral services.
The Canadian bank has underwritten (or should that be undertaken?) a leveraged debt package that backs the £220 million management buy-out of Dignity Funeral Services, the UK's largest such company, which arranges 75,000 funerals and 40,000 cremations a year.
Despite the morbid business - Franklin's other certainty is comparatively jolly - the £140 million senior debt part of the financing was well supported in syndication, with lending banks claiming the deal was backed by a "solid customer base that is growing all the time".
However, the other part of the debt financing, a $40 million mezzanine tranche, was lambasted by investors who claimed the pricing was too aggressive.