Four Firms Bring $1.4 Billion Death Care Deal to Life

The two largest funeral home operators in the United States said Wednesday they have agreed to merge in a deal that would create a combined company well positioned to serve the burial and cremation needs of the nation’s aging baby boomers as they reach their ultimate end.

The transaction’s terms call for Houston-based Service Corporation International, North America’s largest funeral and cemetery services company, to buy Jefferson, Louisiana–based Stewart Enterprises for $1.4 billion in cash. The companies, who expect to realize $60 million in annual savings via the proposed merger, expect the deal to close by the end of this year or early 2014.

Dionne Rousseau, a Baton Rouge, Louisiana–based corporate partner at Jones Walker, is leading a team from the firm advising Stewart on the proposed sale. U.S. Senate records show that Stewart, founded in 1910 and currently the country’s second-largest funeral services provider, paid Jones Walker $110,000 four years ago for lobbying work. Edward George, a partner with New Orleans’s Chaffe McCall, serves as Stewart’s outside general counsel.

Paul Tosetti, cochair of the M&A practice at Latham & Watkins, is advising Stewart chairman Frank Stewart Jr. (the son of company founder Albert Stewart) in connection with the transaction, along with corporate partner Jason Silvera and associates Richmond McMurray and Jordan Miller. Fried, Frank, Harris, Shriver & Jacobson corporate partners John Sorkin and Gus Atiyah are representing Goldman Sachs, which is acting as financial adviser to a special committee of Stewart’s board of directors.

For its part, SCI has turned to Shearman & Sterling for counsel on the proposed acquisition. Leading the firm’s team on the matter are M&A partners John Marzulli and Robert Katz, employee benefits partner Doreen Lilienfeld, antitrust partners Dale Collins and Jessica Delbaum, capital markets partners J.D. DeSantis and Robert Evans, and tax partner Michael Shulman.

Founded in 1962, SCI was one of the so-called death industry’s three largest companies at the start of this century, according to Bloomberg. Stewart, which rejected a previous SCI takeover bid in 2008, and Cincinnati-based Alderwoods Group, which adopted its name after emerging from bankruptcy in January 2002, were the others.