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Is there an investment opportunity in death?

Thiveyen Kathirrasan
Thiveyen Kathirrasan12/14/2018 11:55 AM GMT+08  • 2 min read
Is there an investment opportunity in death?
SINGAPORE (Dec 14): As long as people are mortal, the funeral and death care service industry would thrive. Although the funeral and death care service industry is generally not a growth industry; however, it is particularly stable and sustainable.
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SINGAPORE (Dec 14): As long as people are mortal, the funeral and death care service industry would thrive. Although the funeral and death care service industry is generally not a growth industry; however, it is particularly stable and sustainable.

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.

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