Octopus leads £3.75m round for funeral business

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Octopus Investments Intermediate Capital team has led a £3.75m funding round to finance the buy-and-build strategy of Funeral Services Partnership Ltd (FSP). Existing investor Aberdeen Asset Managers Growth Capital also participated in the deal, which represents Octopus Investments Intermediate Capital's first investment from its new £45m fund.

Of the £3.75m funding, Octopus provided £2.75m in exchange for a sub-10% preferred equity stake. The company will look to take on an appropriate level of senior debt in due course. Aberdeen provided £1m which follows the £4m founding investment it made in FSP between April and June 2007. Aberdeen owns a significant minority stake in the company.

The new funding has enabled FSP to complete the acquisition of five more funeral businesses in the south of England. FSP was founded earlier this year by Phillip Greenfield, a former founder and director of the Fairways funeral business, which was sold in a multi-million pound transaction in 2006. The company aims to grow into a major independent funeral services group comprising funeral services businesses and associated services, such as headstone suppliers, across the UK. It operates from 15 locations with a core base of seven funeral services firms in the Midlands and South Yorkshire. (Page 28).