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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 20, 1996
THE LOEWEN GROUP INC.
(Exact name of registrant as specified in its charter)
British Columbia, Canada 0-18429 98-0121376
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
4126 Norland Avenue, Burnaby, British Columbia V5G 3S8
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code 604-299-9321
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N/A
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(Former name or former address, if changed since last report)
Exhibit Index is on page 3
Page 1 of 6
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ITEM 5. OTHER EVENTS.
Pursuant to Form 8-K, General Instructions F, registrant hereby incorporates by
reference the press release attached hereto as Exhibit 99.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibit No. Description
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Exhibit 99 The Loewen Group Inc. Press Release dated
November 20, 1996
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 21, 1996
THE LOEWEN GROUP INC.
By: /s/ PETER S. HYNDMAN
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Name: Peter S. Hyndman
Title: Corporate Secretary
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EXHIBIT INDEX
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Sequential
Number Exhibit Page Number
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99 The Loewen Group Inc. 4
Press Release dated November 20, 1996
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The Loewen Group
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News Release
Stock Symbols:
NYSE: LWN
TSE: LWN
ME: LWN
(All amounts listed in U.S. dollars)
Investor Contacts: Media Contacts:
Paul Wagler, Senior Vice President, Finance David Laundy, VP, Communications
Dwight Hawes, Vice President, Finance The Loewen Group Inc.
The Loewen Group Inc. Tel: (604) 293-7857
Tel: (800) 347-7010
Chris Tofalli
Howard A. Lipson Broadgate Consultants, Inc.
Blackstone Capital Partners Tel: (212) 229-2222
Tel: (212) 836-9844
FOR IMMEDIATE RELEASE
THE LOEWEN GROUP AND BLACKSTONE CAPITAL PARTNERS COMPLETE
$240 MILLION PURCHASE OF ROSE HILLS MEMORIAL PARK
. Acquisition of Largest Cemetery and Mortuary in the
U.S. is Second Joint Transaction for Loewen Group
and Blackstone
. Proceeds to Fund New $250 Million Foundation to
Benefit Southern California
. CEO Appointed and New Board Formed
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VANCOUVER and NEW YORK, November 20, 1996 -- The Loewen Group Inc. (NYSE, TSE,
ME: LWN) and Blackstone Capital Partners II Merchant Banking Fund L.P.
announced today that the Rose Hills Company, a new company formed by them, has
completed the acquisition of the Rose Hills cemetery and related mortuary of
Los Angeles for US$240 million. Loewen Group will initially have a 20.5 percent
common equity interest in the new company, with Blackstone Group holding the
remainder.
Rose Hills is the largest cemetery in North America and its mortuary serves
more families annually than any other single location in the United States.
Most of the proceeds from the sale of Rose Hills will be used to fund a major
new charitable foundation with assets of approximately US$250 million dedicated
to projects and institutions
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benefiting the quality of life in Southern California. "We are especially
pleased that the proceeds from this transaction will be used for humanitarian
purposes" said Raymond L. Loewen, chairman and chief executive officer of the
Loewen Group.
Rose Hills is a crown jewel in this industry because of its distinguished
history and prominent market position and we are all proud of our affiliation
with it" Mr. Loewen added. "This strategic investment reinforces our position
as the preferred acquirer in our industry and demonstrates our success in
securing prime properties. We expect the transaction to be accretive to
earnings per share."
Loewen Group contributed US$95 million in cash and property and Blackstone
Group contributed US$35 million in cash to fund the equity of the transaction.
The remainder of the funds was provided by bank debt syndicated by Goldman,
Sachs & Co. and Bank of Nova Scotia and 9.5 percent senior subordinated notes
issued by Rose Hills and syndicated by Smith Barney Inc.
Stephen A. Schwarzman, Blackstone's president and chief executive officer,
said, "We believe this investment provides another excellent opportunity to
join forces with Loewen Group, an industry leader both in terms of the quality
of services it provides as well as operating performance. Loewen Group's
operating expertise ensures that Rose Hills' position as one of the premier
properties in the industry will be enhanced."
Kendall E. Nungesser was named president and chief executive officer of the
Rose Hills Company, effective immediately. Mr. Nungesser was formerly executive
vice president and chief financial officer of Roses Inc., the company which
previously owned the mortuary and operated the cemetery. Dennis C. Poulsen, who
will serve as chairman of the board, was formerly president and chief executive
officer of Roses, Inc.
In addition to Messrs. Nungesser and Poulsen, the board of directors will
include: Doug McKinnon, executive vice president of Loewen Group; Larry Miller,
executive vice president, operations of Loewen Group; and Howard A. Lipson,
Chinh E. Chu and David Foley of Blackstone Group.
The transaction secures an option for Loewen Group to acquire Blackstone
Group's interest in Rose Hills at a later date. Loewen Group can "call" or
purchase Blackstone Group's share in Rose Hills after four years and for a
two-year period thereafter, and Blackstone Group can "put" or require Loewen
Group to purchase its investment at a formula price after six years and for a
two-year period thereafter. This structure avoids the need for Loewen Group to
issue shares now, at a price the company considers undervalued, in order to
acquire a 100 percent interest in Rose Hills.
Included among Rose Hills' operations and assets are Rose Hills Memorial Park,
the largest cemetery in North America, and its mortuary, which serves more
families annually than any other single location mortuary in the United States.
As part of the transaction, 14 funeral homes and two combination funeral
home/cemetery operations currently owned by Loewen Group in Los Angeles and
Orange Counties will be integrated into the new company.
This is the second transaction in which Blackstone Group has chosen to partner
with Loewen Group. Blackstone and Loewen Group recently formed a company which
purchased Prime Succession Inc.
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of Batesville, Indiana, North America's fourth largest supplier of funeral
services, for US$295 million.
To date in 1996, Loewen Group has been involved in acquisitions or structured
transactions totaling US$1.3 billion. Loewen Group has signed or closed US$800
million in acquisitions. The Company has acquired 138 funeral homes, 120
cemeteries, and two insurance companies, with an aggregate purchase price of
approximately US$549 million. Additionally, the Company has signed agreements
for the acquisition of 85 additional funeral homes and 83 additional cemeteries
for an estimated aggregate purchase price of US$251 million.
In addition, with Blackstone Group, Loewen Group has invested in the US$240
million Rose Hills transaction and the earlier US$295 million Prime Succession
Inc. transaction, which was completed in August 1996. Loewen Group invested
US$78 million in cash in the Prime transaction and US$72 million in cash and
US$23 million in property in the Rose Hills transaction.
With offices in Vancouver, Cincinnati, and Philadelphia, Loewen Group is the
second largest funeral and cemetery services company in North America,
employing over 13,000 people, and operating 951 funeral homes and 299
cemeteries across the United States and Canada. More than 90 percent of the
Company's revenue is generated in the United States. For the past five years,
Loewen Group has generated a compounded annual revenue growth rate of
approximately 43 percent per annum. The Company recently announced that third
quarter earnings from operations increased to US$47.3 million, up 67 percent
from the same period in 1995.
The Blackstone Group L.P. is a private investment bank based in New York and
founded in 1985 by Peter G. Peterson, its current chairman, and Stephen A.
Schwarzman. Blackstone Group's main businesses include strictly friendly
principal investments, real estate investing and asset management,
restructuring and merger and acquisition advisory services. Blackstone Capital
Partners II Merchant Banking Fund L.P., the firm's principal investment
vehicle, has approximately $1.3 billion of committed equity capital.
A primary thrust of Blackstone's investment strategy is to invest in promising
situations together with major corporations. Several of Blackstone's most
successful investments have been in the corporate partnership form. Previous
Blackstone corporate partnership investments have been with Aon, CNA, EDS,
Mitsubishi, Time Warner, Union Carbide, Union Pacific and USX.
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