Oct. 15, 2009 (PR Newswire) --
HOUSTON, Oct. 15 /PRNewswire-FirstCall/ -- Service Corporation International (NYSE: SCI), which owns and operates funeral service locations and cemeteries, today announced the execution of a definitive support agreement with Keystone North America Inc. "Keystone." Under the terms of the agreement, SCI has agreed to offer to purchase all the outstanding common shares of Keystone, including those represented by income participating securities, at C$8.00 per share, for a total estimated transaction value of approximately $256 million (including Keystone's outstanding debt).
The offer price represents a 38% premium to Keystone's most recent 50-day average share price and is conditioned upon, among other things, the tender of at least two-thirds of the outstanding shares of Keystone's common shares, calculated on a fully diluted basis. The Boards of Directors of both companies have unanimously approved the transaction.
The transaction is anticipated to close in the first quarter of 2010, subject to customary closing conditions, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Act. SCI has substantial cash on hand which will be used in the transaction and has also received a commitment letter from JPMorgan Chase Bank, N.A. and Bank of America, N.A. for a $250 million bridge facility. SCI believes that it has a number of debt capital market alternatives and will determine the optimal funding structure consisting of a combination of long-term permanent debt and short-term pre-payable debt prior to the close of the transaction. Upon closing, the transaction is expected to be immediately accretive to SCI's cash flow and earnings in 2010.
SCI, headquartered in Houston, Texas is North America's leading provider of death-care products and services. At June 30, 2009, SCI owned and operated 1,264 funeral homes and 365 cemeteries in 43 states, eight Canadian provinces, the District of Columbia and Puerto Rico.
Keystone, headquartered in Tampa, Florida is North America's 5th largest provider of death-care products and services with 199 funeral homes and 15 cemeteries operating in 31 states and the Province of Ontario, focusing specifically on the small to mid-size markets.
"Our current portfolio has over 300 similarly positioned businesses which consistently generate solid margins and predictable cash flows," said SCI President and CEO Tom Ryan.
