The InvoCare Limited (ASX: IVC) share price is one to watch this morning after the company’s latest acquisition update.
What did InvoCare announce this morning?
The Aussie funeral company has entered into 2 separate sales agreements for business on the southern New South Wales coast.
InvoCare will acquire the business and assets of Batemans Bay and Moruya District Funerals as well as Broulee Memorial Gardens. The company expects to complete the purchases by the end of November.
The InvoCare share price has already lifted 1.48% in early trade to $13.68 per share.
Batemans Bay & Moruya District Funerals operates from 3 locations in Batemans Bay, Moruya and Narooma. The company performed over 400 funerals every year with annual revenue of $3 million.
Broulee Memorial Gardens performs 380 cremations per year including chapel services and memorialisation.
There was no dollar amount provided by InvoCare in the announcement regarding acquisition cost.
Where is the InvoCare share price headed this morning?
InvoCare shareholders have reacted to the news in early trade this morning, with the company’s share price lifting 1.48% at time of writing. Acquirers’ shares often trade heavily in the period after announcing an acquisition and this could be the case even with the smaller targets.
The company’s shares also closed 0.97% higher on Monday at $13.48 per share as the S&P/ASX 200 Index (INDEXASX: XJO) hit a 3-month high.
How has the InvoCare share price performed this year?
The InvoCare share price has rocketed more than 32% higher so far this year to significantly outperform the ASX 200.
The Aussie funeral home operator has also managed to outpace fellow ASX competitor Propel Funeral Partners Ltd (ASX: PFP). The Propel share price is up 21.12% so far this year as the ASX Healthcare sector has had a strong 2019 performance.
I’d expect to see continued movement from the InvoCare share price during morning trade following this acquisition news.
InvoCare is currently trading at a 36x earnings multiple with a tidy 2.71% net dividend yield.
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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended InvoCare Limited and Propel Funeral Partners Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.