Australia’s InvoCare agrees to revised $1.2 billion buyout offer from TPG

(Reuters) -Australia’s InvoCare Ltd said on Wednesday it has agreed to a lower takeover offer from U.S. private-equity firm TPG Global, valuing the funeral service provider at A$1.8 billion ($1.18 billion) following exclusive due diligence.

TPG tabled an all-cash offer of A$12.70 per share, lower than its previous A$13 bid for the New South Wales-based company.

InvoCare’s board unanimously recommended its shareholders to vote in favour of the revised proposal.

Shares of Invocare have been on a trading halt since Monday.

The deal includes a franked special dividend of up to 60 Australian cents per share that the board said represents total implied value of about A$12.96 apiece.

Invocare also flagged a challenging macro environment, citing that softer market volumes and inflationary pressures have impacted its margins.

The company expects to report earnings before interest, tax, depreciation, and amortization (EBITDA) for the first half in the range of A$61 million to A$63 million, compared with A$68.5 million a year ago.

TPG, which holds a 19.2% stake in InvoCare, had initially approached the target in March with a A$12.65-per-share offer.

TPG did not immediately respond to a Reuters’ request for comment.

In May, InvoCare had received the A$13 apiece bid from TPG and agreed to a five-week due diligence on an exclusive basis to deliver a binding offer.

($1 = 1.5298 Australian dollars)