SINGAPORE (Dec 17): Two years ago, Nirvana Asia, the largest integrated death care service provider in Asia, was privatised. The US$1.1 billion acquisition of Nirvana Asia Ltd by CVC Capital Partners, a leading global private-equity firm, was done at a 22.4% premium above the prevailing price. At that time, Nirvana had a third of the market share in Singapore and Malaysia. Its services included the entire death care service value chain, and the company was a pioneer in pre-need death care services in Asia. Some of its financial highlights included a strong cash position with zero gearing (interest-bearing debt), an adjusted five-year earnings before interest, taxes, depreciation and amortisation (Ebitda) and net profit margin compound annual growth rate (CAGR) of over 30%, and a reduction of costs and expenses as a percentage of revenue by 10% within five years, indicating Nirvana’s economies of scale. Companies that provide death care services can be profitable even though death is a topic that is generally avoided, especially by the superstitious.

In life, only death and taxes are certain, as pointed out by Benjamin Franklin. The funeral and death care service industry is generally not a growth industry; however, it is particularly stable and sustainable. The value chain of the industry can be segregated into three main segments: funeral homes and services; crematories and cemeteries; and burial services. 

The funeral homes and services segment includes embalming the body and conducting funeral-related activities such as organising the wake, transportation and interment. This segment also functions as retailers for the burial services segment, for example, through the selling of caskets. The crematories and cemeteries segment is mainly involved in dealing with the operating sites and structures of cemeteries, sale of interment rights, and cremation facilities. The burial services segment involves the manufacturing of burial and memorial products such as tombstones and urns. 

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