InvoCare Limited (ASX: IVC) is the largest private funeral, cemetery and cremation operator in the Asian Pacific region.
Today, InvoCare announced that it would be acquiring the business and assets of J.A. Dunn Funeral Services based in Launceston, Tasmania.
The business has been operating for more than a century, it has a strong heritage, location and market share according to the InvoCare market release.
The assets purchased will include the brand, plant and equipment, motor vehicles and prepaid contracts. Dunns directs around 200 funerals and generates revenue of around $1 million per year.
InvoCare's CEO, Martin Earp, said "This will build on our successful business in Hobart and provide us with strong local market share and the opportunity to build on this.
"We will continue to review acquisition opportunities in our core and new markets, to provide us with the right brand in locations where we can position the business for long-term sustainable growth. We are investing in our 'Protect & Grow' strategy to remain competitive in our core markets and opportunities like Dunns provide us with further reach in a new area".
InvoCare is projected to have a growing future with the number of deaths expected to grow by 1.4% per annum from 2016 to 2025 and then by 2.2% from 2025 to 2050 according to population projections by the Australian Bureau of Statistics.
Foolish takeaway
I think this seems like a good move by InvoCare. It's usually a good idea to enter another large urban area.
I believe that InvoCare offers the longest growth runway on the ASX due to the projected long-term death rate and I think it's a long-term buy at the current price.
