Duke Street leads £37.5m SBO of LM Funerals

Anneken Tappe
10 April 2012

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Duke Street, Babson Capital Europe and Metric Capital Partners have acquired LM Funerals from Sovereign Capital.

CEO Deborah Kemp, finance director Paul Moss, operations director Simon Beaumont and acquisitions director Russell Trenter will also be shareholders in the business.

Duke Street recently changed its funding strategy to raise capital on a deal-by-deal basis to cater to investor appetite; the acquisition of LM Funerals is the first example of this new strategy.

The acquisition yields a 3.4x money for Sovereign Capital. The transaction represents the sixth exit from SCLP I, Sovereign's first fund, which closed in 2000.

Debt
HSBC, RBS, Babson Capital Europe, Metric Capital Partners and Alcentra provided financing for the deal.

Previous funding
Soveign Capital first acquired LM Funerals in September 2003 for £11m from 3i and Aberdeen Murray Johnstone Private Equity. It has made numerous bolt-on acquistions.

Company
LM Funerals was founded as Laurel Management in 2003. The business manages 65 sites and has its own M&A team. LM operates throughout the UK. It is headquartered in Wolverhampton.

People
Charlie Troup, partner, led the acquisition on behalf of Duke Street. Johanna Waterous, who recently joined Duke Street as operating partner, will join LM's board of directors as non-executive chairman. Kevin Whittle, partner, led the exit for Sovereign Capital.

Advisers
Equity - SJ Berwin, Nicholas Plant, Tim Wright, Duncan Woollard, Daniel Webster (Legal); PwC (Corporate finance).