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Opinion

A dignified buy-out

       
Franklin: an expert on death
and taxes

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.




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