A PE giant spent 6.6 billion to buy a crematorium.

There is an old Chinese saying, "Treat the deceased as if they were still alive." It means that in the collective consciousness of the Chinese people, death is not the end of life but a brand - new and unknown journey. Therefore, to ensure that deceased family members and friends can "set off" smoothly, Chinese funerals are often grand and detailed. On the one hand, various rituals are carried out to guide the deceased onto the right path. On the other hand, burial objects are made according to the deceased's living scenes during their lifetime to provide the last "material" assistance to the deceased.

Under the influence of this concept, we have witnessed the peerless chime bells in the Tomb of Marquis Yi of Zeng, the mercury rivers in the Mausoleum of the First Emperor, the jade burial suit sewn with gold thread of Liu Sheng, the joint shrine of Liu Bei and Zhuge Liang, and the twenty - four meritorious officials guarding the Zhaoling Mausoleum of the Tang Dynasty for thousands of years.

However, today, "treating the deceased as if they were still alive" has become a big problem. With the scientific progress driving the overall transformation of the world's perception, people have a new "view of death." They increasingly dislike squandering money on vain rituals and burial objects and do not want their "feelings of longing" to be turned into a business. Paradoxically, in the era of the commodity economy, the marketization of the funeral industry is almost irresistible. According to a report from the Qianzhan Industry Research Institute, the scale of China's funeral service market reached 169.5 billion yuan in 2015, and it is expected to double to 411.4 billion yuan by 2026.

What's even more annoying is that this contradiction seems to be a global phenomenon. Recently, there was a rather contradictory deal in the UK: European PE giant Cinven is trying to acquire Pure Cremation, the largest funeral service provider in the UK, with an expected price between £500 million and £700 million (approximately 4.7 billion to 6.6 billion yuan). Once the deal is completed, it will set a new record for mergers and acquisitions in the European funeral industry. In fact, the original intention of founding Pure Cremation was to vigorously promote cremation services and help people save as much money as possible in dealing with "death."

Minimalism in Death

In many people's impressions, funerals in European and American countries have always been very simple, just like the final scene in Forrest Gump, with only a tombstone and a few flowers.

(Movie screenshot)

However, in reality, funerals in European and American countries are far more complicated than what is shown in the movies, and they are never a cost - saving thing. In an atmosphere where the whole population believes in religion, there are mainly three major consumption items for European and American people in "funerals": the funeral ceremony (such as the body viewing ceremony), storage (wooden or other material coffins, body embalming, etc.), and the cemetery (including the tombstone).

In 2021, a survey conducted by the National Funeral Directors Association (NFDA) in the United States found that the median cost of a funeral for an American was $7,848 (approximately 55,700 yuan). If a coffin was included, the price would rise to $9,420 (approximately 66,850 yuan).

In addition, there are additional charges for tombstones, graves, funeral supplies (flowers, obituaries, etc.), clergy, and transportation. According to NFDA statistics, the price of a cemetery plot in the United States ranges from $300 to $5,000. The more developed the city, the higher the price, and this only buys the "right to occupy the land."

If you want to use the cemetery (that is, dig and fill the grave), there will be an additional charge. The "usage fee" for a public cemetery is about $1,000, and that for a private cemetery is about $3,000. The price of tombstones is also similar. The price of a vertical stone tombstone like the one Forrest Gump erected for Jenny ranges from $2,000 to $5,000. If it is laid flat, it will be relatively cheaper, with the price compressible to about $1,000.

All in all, the funeral industry has long become a big business in Europe and America, and the capital activity far exceeds people's imagination. For example, in 2013, Service Corporation International (SCI), the largest funeral service provider in the United States, tried to acquire Stewart, the second - largest funeral service provider in the United States, for $1.4 billion (approximately 9.9 billion yuan), which directly triggered the intervention of anti - monopoly agencies. At that time, SCI was already a giant with 1,449 funeral homes and 374 cemeteries, with an annual revenue of $2.41 billion. If it acquired the 217 funeral homes and 141 cemeteries owned by Stewart, it was very likely to raise prices at will by virtue of its monopoly position and make huge profits.

2022 was a peak year for the capitalization of the funeral industry. In that year, there were 19 merger and acquisition transactions in the funeral industry in North America, with a total transaction scale of $889 million, making it the most active year for capital transactions in this field since 2004. The above - mentioned American funeral industry giant SCI also officially exceeded a market value of $10 billion in that year.

The protagonist of today's story, Pure Cremation, is targeting this business opportunity.

The founder of Pure Cremation is Bryan Powell, an experienced mortician. Initially, he had no intention of starting a business or "disrupting" the industry because no one in the UK thought there was anything wrong with the current mainstream funeral form. In fact, many people considered the current mainstream funeral form in the UK a "living fossil," which completely retained the imprints of the Victorian era 200 years ago, being elegant, simple, and solemn.

However, after 2010, he noticed that people's needs had changed. More and more people began to tell him that they did not want their relatives' funerals to be carried out in such a solemn way. "Having a barbecue on the beach where the relatives loved the most, raising a glass to commemorate them in their favorite bar, or having a family gathering in a scenic place is far more attractive than renting a fleet of luxury cars at a high price, wearing black clothes collectively, and watching a stranger host a 30 - minute ceremony."

So in 2015, Bryan Powell finally made up his mind to open a funeral service company that better met "consumer needs," featuring a "full - process self - service cremation service." It supports door - to - door pick - up and delivery after cremation, with a one - time all - inclusive fee and no additional charges. To better realize this idea, he also invested $8.5 million to build a crematorium in Hampshire, UK, to ensure that the cost was within his control.

Subsequent facts proved that Bryan's judgment was correct. Pure Cremation has been very popular since its establishment. In 2017, they completed 1,000 cremations, and this number doubled to 2,000 in 2018. In addition, they also offer pre - sales of cremation services, allowing people to make arrangements for their own funerals in advance, just like an insurance company. According to a report from Sky News in the UK, more than 65,000 copies of this pre - sale service were sold in 2021.

Such performance naturally attracted the attention of the capital market. In 2018, they received an investment of $10 million from Puma Investments, a UK private equity investment institution (not the one that sells shoes). In July 2023, the UK PE fund Epiris acquired Pure Cremation. According to Sky News, the transaction price at that time was $533 million (approximately 3.785 billion yuan).

It's Not Easy to "Save Money"

So why did Epiris want to sell such a company with great growth potential? Epiris has not publicly responded yet, but it doesn't prevent us from finding the answer.

Currently, we know that Epiris probably initiated the selling process around September 26th, entrusting the UK investment bank Houlihan Lokey to send bidding invitations to potential investors. Houlihan Lokey estimated the value of Pure Cremation to be between £500 million and £700 million, that is, between $660 million and $925 million. That means that after holding the company for two years, the asset value increased by about 23% to 73%.

Some analysts pointed out that although funerals are a necessity and people have an emotional impulse for "high - end consumption," which supports the generally good revenue of funeral service companies, from the perspective of the operation model and financial model, funeral service companies will eventually tend to be "public - utility - type enterprises." They will not experience explosive high - growth, and it is therefore difficult for them to obtain high - multiple valuations. The reason why Pure Cremation has shown a high valuation growth rate is largely because the differentiated services it provides meet the current consumer needs and it has reaped the "new - consumption dividend."

In this situation, it is a good choice for Epiris to cash out before Pure Cremation also becomes a "public - utility - type company." In fact, when Epiris completed the acquisition in July 2023, Alex Fortescue, a managing partner of Epiris, indirectly mentioned this point, saying that Pure Cremation is an enterprise that can bring a new perspective, drive change, and occupy a good position in a well - established and mature market.

Another variable is that in 2015, people's boredom with the "complicated funeral process" might still have been an information gap, but by 2025, it has become an open secret. Even in a conservative country like the UK, after the special three - year period from 2020 to 2022, people have begun to get used to "keeping everything simple" and no longer blindly pursue "religious - style" funerals.

That is to say, in order to continue to reap the "funeral - civilianization" dividend, Pure Cremation actually needs to invest a large amount of money and make greater efforts to enhance its competitiveness, provide more services that meet the aesthetics of this generation of consumers, and avoid losing business to other competitors. In fact, in the same week when the merger and acquisition news of Pure Cremation came out, a capital giant really tried to acquire another funeral service enterprise. According to multiple media reports, Duke Street, a well - known European PE in the medical and consumer fields, is preparing to bid £200 million to acquire Funeral Partners, a well - known UK funeral service brand.

Under pressure, Pure Cremation has also been trying to leverage financial resources as much as possible. In January 2022, Pure Cremation cooperated with the UK investment bank FinnCap to explore the possibility of an IPO.

From this perspective, Epiris's support is indeed limited. Although Epiris is an established player in the UK PE circle, having started its business in 1976 and claiming to be among the top 10% in Europe, in the final analysis, Epiris's current asset management scale is £2.3 billion. In contrast, Cinven, one of the acquirers this time, is much more powerful. The scale of their 13th flagship fund alone reaches 13.2 billion euros. In addition, Cinven has a large number of insurance service enterprises, elderly care service enterprises, and medical and health care enterprises such as Viridium Gruppe and Stada Arzneimittel under its banner, which can provide a large number of business combinations for Pure Cremation.

It can be said that if the transaction can be successfully completed, the entrepreneurial journey of Pure Cremation may truly be at its "beginning." However, for the majority of European and American people, it is a bit of a black - humor that the industry changer that has finally emerged has joined hands with a financial giant.

This article is from the WeChat official account "Dongshisitiaojie Capital" (ID: DsstCapital), written by Pu Fan and published by 36Kr with permission.