Park Lawn Corporation Agrees to Acquire Midwest Memorial Group and Announces C$15 Million Bought Deal Offering

TORONTO, ONTARIO--(Marketwired - Dec. 2, 2015) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Park Lawn Corporation (TSX VENTURE:PLC) ("Park Lawn" or the "Company") is pleased to announce that it has entered into a definitive agreement to acquire (the "Acquisition") all of the outstanding membership interests of Midwest Memorial Group, LLC ("MMG") for a purchase price of approximately US$16 million in cash, subject to customary working capital and other adjustments, plus an additional potential earn-out cash payment based on the future financial performance of MMG. MMG currently owns 26 cemeteries (including nine with crematoria) and manages two cemeteries in the State of Michigan.

In conjunction with the Acquisition, the Company also announced that it has entered into an agreement with National Bank Financial Inc., on behalf of a syndicate of underwriters, to issue, on a bought deal basis, approximately C$15 million of subscription receipts (the "Subscription Receipts") to partially finance the Acquisition (the "Offering").

"We are very excited about the acquisition of MMG," said Andrew Clark, Chairman and Chief Executive Officer of the Company. "The Acquisition significantly increases our scale and gives us an operating platform in the United States, which we believe will assist with future expansion efforts in that market."

Completion of the Acquisition, which is expected to occur on or about February 28^th, 2016, is subject to the satisfaction or waiver of certain closing conditions, including, among other things, third party consents and approvals.

Acquisition Highlights

• Accelerates the Company's growth strategy, while providing a scalable platform with critical mass.
  
  
• Significantly increases the Company's revenue and asset base. For the 12 months ended September 30, 2015, MMG generated approximately US$28.2 million of revenue and as of September 30, 2015 MMG had assets of approximately US$64.2 million.
  
  
• Significantly increases the number of cemeteries in the Company's portfolio, and geographically diversifies the Company's assets outside of Canada.
  
  
• Going forward, MMG's experienced management will join the Company's existing management team, which will help to further execute the Company's growth strategy.
  
  
• Expected to be accretive to the Company's adjusted cash flow assuming the completion of the proposed Offering, but without considering any revenue or cost synergies, restructuring, integration expenses and transaction related costs.
  
  
• While MMG has underperformed on a historical basis, after completing due diligence, the Company believes there are a number of business improvements it can implement, while also realizing on cost synergies.
  
  
• Management believes, that with expected cost synergies and operational improvements to be realized over a period of 12 to 18 months, EBITDA will expand from breakeven levels and the Acquisition will fall within the multiple range for precedent transactions in the death care industry of between 5.0x and 8.5x EBITDA.
  
  

Description of MMG

MMG owns and manages 28 cemeteries in the state of Michigan, with the core of the portfolio being located in the Detroit metropolitan area. Many of the Detroit area cemeteries date back nearly 100 years or more and are landmarks within the community. As part of its operations, MMG sells products and services associated with the disposition and memorialization of human remains, including burial spaces, mausoleum crypts and niches, lawn crypts and various related products and services. MMG sells these products and services on a pre-planned basis (pre-need) or at the time of a death (at-need basis). The following is a list of the names and locations of the cemeteries MMG owns and/or manages:

Name	Location in the State of Michigan	Owned/Managed
Acacia Park Cemetery	Detroit Area	Owned
Albion Memory Gardens	Jackson Area	Managed
Cadillac Memorial Gardens East	Detroit Area	Owned
Cadillac Memorial Gardens West	Detroit Area	Owned
Chapel Gardens Cemetery	Jackson Area	Managed
Eastlawn Memorial Gardens and Mausoleum	Jackson Area	Owned
Elm Lawn Cemetery	Jackson Area	Owned
Floral View Memorial Gardens	Grand Rapids Area	Owned
Forest Lawn Memorial Gardens	Jackson Area	Owned
Forest Lawn Memorial Park	Detroit Area	Owned
Gardens of Rest Memorial Park and Mausoleum	Upper Peninsula	Owned
Graceland Memorial Park and Mausoleum	Grand Rapids Area	Owned
Grand Lawn Cemetery and Mausoleum	Detroit Area	Owned
Hillcrest Memorial Park	Jackson Area	Owned
Kent Memorial Gardens	Grand Rapids Area	Owned
Midland Memorial Gardens	Jackson Area	Owned
Mount Hope Memorial Gardens	Detroit Area	Owned
Northland Chapel Gardens	Upper Peninsula	Owned
Oakland Hills Memorial Gardens	Detroit Area	Owned
Oakview Cemetery	Detroit Area	Owned
Oakwood Memorial Mausoleum	Jackson Area	Owned
Restlawn Memorial Gardens	Grand Rapids Area	Owned
Roseland Park Cemetery	Detroit Area	Owned
Roselawn Memorial Gardens	Jackson Area	Owned
United Memorial Gardens	Detroit Area	Owned
Washtenong Memorial Park and Mausoleum	Detroit Area	Owned
Woodlawn Cemetery	Detroit Area	Owned
Woodmere Cemetery	Detroit Area	Owned

Subscription Receipt Offering

The Company has reached an agreement with National Bank Financial Inc., on behalf of a syndicate of underwriters (the "Underwriters"), to issue 1,305,000 Subscription Receipts at a price of C$11.50 per Subscription Receipt, on a bought deal basis, for gross proceeds of approximately C$15 million. The Company has also granted the Underwriters an option to purchase up to an additional 195,750 Subscription Receipts on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of the Offering (the "Over-Allotment Option").

Upon the satisfaction or waiver of each of the conditions precedent to the closing of the Acquisition (other than the payment of the consideration for the Acquisition): (a) one common share of the Company (a "Common Share") will be automatically issued in exchange for each Subscription Receipt (subject to customary anti-dilution protection), without payment of additional consideration or further action by the holder thereof; (b) an amount per Subscription Receipt equal to the per-share cash dividends declared by the Company on the Common Shares to holders of record on a date during the period that the Subscription Receipts are outstanding, net of any applicable withholding taxes, will become payable in respect of each Subscription Receipt; and (c) the net proceeds from the sale of the Subscription Receipts will be released from escrow to the Company for the purposes of completing the Acquisition.

The net proceeds from the sale of the Subscription Receipts will be held by an escrow agent pending the fulfillment or waiver of all outstanding conditions precedent to closing of the Acquisition (other than the payment of the consideration for the Acquisition). There can be no assurance that the applicable consents and regulatory approvals will be obtained, that the other closing conditions will be met or that the Acquisition will be consummated.

If the Acquisition fails to close as described above by April 30, 2016 or if the Acquisition is terminated at an earlier time, the gross proceeds of the Offering and pro rata entitlement to interest earned or deemed to be earned on the Subscription Receipts, net of any applicable withholding taxes, will be paid to holders of the Subscription Receipts and the Subscription Receipts will be cancelled.

The Subscription Receipts will be offered pursuant to a short-form prospectus to be filed in each of the provinces of Canada, which will describe the terms of the Offering. The Offering is expected to close on or about December 22, 2015 and is subject to certain conditions including, but not limited to, the receipt of all regulatory approvals including the approval of the TSX Venture Exchange (the "TSXV").

National Bank Financial Inc. acted as financial advisor to Park Lawn on the Acquisition.

The securities offered pursuant to the Offering have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, (the "1933 Act") and may not be offered, sold or delivered, directly or indirectly, in the United States, or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the 1933 Act), except pursuant to an exemption from the registration requirements of the 1933 Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States or to, or for the account or benefit of, U.S. persons.

About Park Lawn

Park Lawn Corporation provides goods and services associated with the disposition and memorialization of human remains. Products and services are sold on a pre-planned basis (pre-need) or at the time of a death (at-need). The Company owns and operates six cemeteries in the Greater Toronto Area and operates the crematorium at the Brampton Crematorium and Visitation Centre. The Company also operates Tubman/Cadieux Funeral Homes in the Ottawa region and Parkland Funeral Holdings in Manitoba and Saskatchewan. The Company's Harmonia business currently operates under license in Quebec City, Laval, Saint-Apollinaire and Saint-Georges.

Cautionary Statement Regarding Forward-Looking Information

This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the business of the Company and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate", "pro-forma" and other similar expressions. These statements are based on the Company's expectations, estimates, forecasts and projections and include, without limitation, statements regarding the completion of the Acquisition, the completion of the Offering, the proposed use of proceeds of the Offering, the anticipated effect of the Acquisition and Offering on the performance of the Company (including the extent to which the Acquisition is accretive to adjusted cash flow) and the expected purchase multiple. The forward-looking statements in this news release are based on certain assumptions, including without limitation that all conditions to completion of the Acquisition and the Offering will be satisfied or waived, the Company will be able to implement business improvements and cost synergies with respect to MMG's business, the Company will be able to retain key MMG personnel, there will be no unexpected expenses occurring as a result of the Acquisition, and that currency exchange rates remain consistent. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under the heading "Risk Factors" in the Company's annual information form available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Non-IFRS Measures

Adjusted cash flow and EBITDA are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS. Such measures are presented in this news release because management of the Company believes that such measures are relevant in interpreting the effect of the Acquisition on the Company. Such measures, as computed by the Company, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable similar measures reported by such other organizations. Please see the Company's most recent management's discussion and analysis for how the Company reconciles such measures to the nearest IFRS measure.