The InvoCare Limited (ASX: IVC) share price has pushed higher on Wednesday and is trading within an inch of its 52-week high.
At the time of writing the funerals company’s shares are up 0.5% to $16.45.
Why is the InvoCare share price on the rise on Wednesday?
Investors have been buying the company’s shares this morning after it announced yet another acquisition.
According to the release, InvoCare has entered into a conditional purchase agreement to acquire Australian Heritage Funerals located in Toowoomba Queensland. The company expects the proposed acquisition to complete by the end of the month.
Management believes Australian Heritage Funerals represents an opportunity for InvoCare to expand its presence in a regional market where it is currently operating under the Hiram Philp Funerals brand and also at the Toowoomba Garden of Remembrance memorial park.
The release explains that Australian Heritage Funerals is a highly successful business in the region, performing around 300 funerals each year. It generates approximately $2 million in annual revenue.
The acquisition also includes a long-term lease over its existing funeral home, mortuary, and chapel, which management intends to use to support InvoCare’s current businesses in the Toowoomba region.
InvoCare’s chief executive officer and managing director, Martin Earp, appeared to be very pleased with the acquisition.
He said: “InvoCare through the Toowoomba Garden of Remembrance has enjoyed a very productive working relationship with the Australian Heritage Funerals team and have met the needs of a large number of Toowoomba families over very many years.”
“We are committed to building on the strong reputation of the team and will continue to provide the highest level of service to the local community. This continues our strategy to grow our presence within regional markets where the right opportunities exist to work with high quality operators.”
InvoCare intends to fund the transaction from its existing financing facilities and considers it to be immaterial to the broader group.
Elsewhere in the industry, the Propel Funeral Partners Ltd (ASX: PFP) share price is trading flat today. Its shares have also been in fine form this year and are sitting close to a 52-week high.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended InvoCare Limited and Propel Funeral Partners Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019