Private equity firm offers to buy funeral services company

Private equity firm CVC Capital Partners has made a buyout offer for Asia's largest funeral services provider Nirvana Asia, in a deal worth more than US$900 million (S$1.2 billion), the Wall Street Journal has reported.

Nirvana's shares closed at HK$2.45 before trading was halted last week, giving it a market capitalisation of HK$6.61 billion (S$1.1 billion).

In a statement to the Hong Kong stock exchange last week, Nirvana said trading in its shares was halted, pending the disclosure of information regarding a takeover or merger.

The buyout deal for Hong Kong- listed Nirvana will be at a premium to that valuation and could be announced soon, the Wall Street Journal reported, quoting sources familiar with the matter.

Nirvana, which has large operations in Malaysia and Singapore, went public in December 2014.

CVC and Nirvana declined to comment.

London-headquartered CVC is a top global private equity firm. It owns a stake in motor-racing franchise Formula One Group and has had a longstanding presence across Asia.

Nirvana, based in Kuala Lumpur, was founded in 1990. It was the first funeral services company in Asia to offer packages to consumers while they are still alive.

The biggest share of the company's revenue - almost 40 per cent - comes from niches, which relatives use to store funeral urns. Almost three-quarters of its revenue come from Malaysia, the Wall Street Journal said.

Nirvana has significant real estate holdings in Malaysia, where it sells burial plots and develops cemeteries. The company caters primarily to Taoists and Buddhists, offering everything from handcrafted paper models to flowers, urns and caskets.

Since its listing in Hong Kong at HK$3 a share, Nirvana's shares have sunk as the company struggles to expand in China, which has a rapidly ageing population but tight restrictions on the ownership of burial plots.

A version of this article appeared in the print edition of The Straits Times on July 06, 2016, with the headline 'Private equity firm offers to buy funeral services company'. Print Edition | Subscribe