Why Are We Still Pretending Homesteaders is ‘Just’ a Park Lawn Investor?
From Vertical Integration to Leverage: A Look at a Very Powerful (and Profitable) Minority Partner
By the time he walked into Park Lawn headquarters on April 13, 2026, armed retinue in tow, Steve Shaffer had completed the circle. He once again headed a massive funeral home operator, but this time, he also ran the insurance company that benefited from every acquisition.
The process was slow and maybe a little angst-filled, like puberty, as over the course of a decade, Shaffer helped transform a stodgy, boring old insurance company into a masterpiece of tech-enabled vertical integration. It started with eFuneral and Domanicare, respectively, helping funeral home owners capture leads. From there, Homesteaders evolved into a lending partner, providing specialized goodwill loans to funeral homes and emerging as the darling of the independent owner.
When Homesteaders set its sights on Park Lawn, though, that was a different thing altogether. Initial concerns that had bubbled up in 2014 when the company took in Shaffer, fresh from an abrupt departure of the consolidator he founded, resurfaced. Had Shaffer been hoping to return to the consolidation game all along? Homesteaders and Shaffer himself dismissed those concerns.
It is the position they hold to this day: Park Lawn is just one of the company’s many investments aimed at driving shareholder value.
It’s a claim I found difficult to parrot two years ago and even harder to countenance today.
The Bad Beginning
I was late to the Park Lawn story and a little unclear about its import as the main pieces slid into place during 2023 and developed throughout 2024. I’ll admit it came at me fast. Plus, it was oblique, and I was still finding my way around deathcare as a beat. Since then, though, I’ve had time to reflect and research, and I’d like to tell you what I’ve found.
From 2018 until the day before the announcement that Homesteaders was a potential buyer, Park Lawn had managed to lose more than one-third of its value on a 115% revenue increase as it piled up debt and diluted its shares. When Homesteaders agreed to pay a 62% premium per share for the company, the sale created a meager upside for languishing Park Lawn investors. The company had peaked at $32.50 during the pandemic, but closed at $11.94 the day before the acquisition announcement. Over that same period, SCI investors earned 90%, and the overall market returned an average of 80-90%. (All the amounts throughout are converted to USD, a lot of the initial reporting was in CAD).
If Park Lawn was an investment no different than a real estate investment, as Shaffer claimed, one imagines they’re talking about a real estate investment circa 2008.
A (Very Brief) History of Park Lawn
Carriage colleagues Brad Green and Jay Dodds bet everything they had on a new venture in 2011 when they left the company to start the Signature Group, conceived as a boutique consolidator. In 2013, they took a basketful of money from JMH Capital Partners to grow the company. Five years after that, they struck a deal with small regional consolidator Park Lawn.
To buy Signature and bring on its wonderperson management team, Park Lawn increased its share count by 70 percent, which not only diluted shareholders but put it on a debt/acquisition treadmill that only sped up over time and may continue to this day. Green and Dodds continued their buying spree.
By the time they laid their eyes on their former employers in 2023, Park Lawn stock had plummeted. Green and Dodds demonstrated they could drive serious revenue without generating shareholder value. Adding the much more conservative (if also struggling) Carriage would put both companies on the debt treadmill, but the revenue would have been fantastic. And just imagine the fees.
Park Lawn was trading at around $18 and Carriage around $27, so an offer of $34 should have been a slam dunk. The reason it wasn’t is still up for debate.
When the deal eventually (and in retrospect inevitably) came apart, the prevailing narrative was that Carriage was just in too much debt to be saved. If I recall, the words “looked under the hood” were bandied by pundits discussing Park Lawn’s “decision” to walk away.
Of course, less than a year after the deal fell apart, Carriage was almost completely turned around. And this is important.
Carriage’s turnaround was predicated on not trying to acquire its way out of debt. Instead, they (mostly) stopped M&A and used their conservative efficiencies to take massive chunks out of their debt while growing their EPS. Maybe Park Lawn didn’t understand putting shareholder value ahead of revenue generation, which is why they couldn’t see a way forward and why they complained constantly that the quarterly earnings reporting was holding them back.
They’d spent the last five years running up debt for acquisition and living off bumps in fees and free cash flow. This is the world they knew. What they needed was less oversight and a bigger checkbook.
This is the real estate-like investment that attracted Homesteaders. They appear to have been convinced that debt, not overacquisitiveness, was Park Lawn’s real problem. It’s a classic money-guy solution.
The Deal of the Century?
Now, no responsible insurance company could buy a property like Park Lawn, with its stock in freefall and its debt threatening to eat it whole. A mutual insurance holding company, though, could really unlock pent-up value. “Unlocking value” can be said to be Shaffer’s primary skill. After all, he founded two seminal consolidators before coming on to learn the insurance business. With the decision to become a mutual holding company, Shaffer combined insurance company credibility and security with venture capital-like acquisitive power.
According to Homesteaders, it was just dumb luck that they were in the middle of gathering all this aquisitive power when the Carriage and Park Lawn deal came apart. Kind of like when you take out a mortgage before you go househunting, but in this case, it’s a billion-dollar house you’re hoping to stumble across, and when you get home from the bank, your neighbors have put up a “For Sale” sign.
Homesteaders has been adamant that the decision to become a mutual holding company had nothing at all to do with the fact that Park Lawn was struggling and looking to acquire its way to solvency. Although both events occurred in late 2023, all involved say the events were unrelated. That is, Shaffer knew he wanted to buy something expensive and transformative, just not what.
Park Lawn was running out of options. They’d made it clear that they could generate revenue, but nearly every nickel they made went to debt or acquisitions and shareholders were starting to tire of being at the end of the cash distribution chain.
In fact, in another stunning coincidence, one of Park Lawn’s greatest liabilities in 2023 came from buying Speaks Family Legacy Care for something on the order of $15 million. Third-generation owner, Brad Speaks, had been running the company for 20 years when he decided to get out. His father, Rob, had been a Selected Independent Funeral Homes stalwart. It was the last deal of that size Park Lawn would complete as a public company.
Park Lawn, which was on track to lose about 5% in comparable revenue as COVID started to level out, posted a 6% gain instead on the strength of the Speaks acquisition. This is a playbook they just kept running, pulling off last-minute deals that kept the money flowing and the analysts grumbling but intrigued.
Welcome to the Sovereign State of Nunya
Brad Green was almost glib during Park Lawn’s Q4 2023 earnings call. I remarked at the time that he didn’t sound like a man justifying disappointing earnings by changing reporting tactics. By the time Green hosted the March 8, 2024, call, he knew the Homesteaders deal was as good as done. In fact, as coincidence mandated, Homesteaders filed its “Limited Application” for reorganization with the Iowa Insurance Division that same day.
Green boasted about Park Lawn’s “new” approach, which was to provide earnings guidance instead of the company’s traditional “Long-Term Aspirational Growth Targets” on the call. He laid out a breadth of earnings numbers and acquisition targets that mostly left analysts scratching their heads.
A month earlier, Shaffer had made his pitch to the Homesteaders stockholders. Even though he was most of the way through a deal to buy Park Lawn, the move was pitched as almost a housecleaning item, a move to “modernize” the stodgy ol’ insurance company.
The plain fact is Homesteaders was well past the point of no return on the Park Lawn deal. Shaffer could easily have said, “We’ve committed, like, half-a-billion dollars that we can’t spend if this vote fails.” Of course, he didn’t have to. The fact that he didn’t consider the risk of the stockholders not doing what he wanted may be the most telling part of this story.
It seems what Park Lawn and Homesteaders had most in common was a deep desire to not have to justify operational decisions to their investors, no matter how high the stakes were.
While Shaffer admitted Homesteaders would have a seat on the board, he was adamant that Park Lawn would remain operationally independent. By 2025, “operationally independent” didn’t include the ability to choose an insurance carrier. In fact, since the Homesteaders deal, 75% of the Park Lawn acquisitions have been of funeral home groups that weren’t Homesteaders customers beforehand. Afterwards, everyone is.
Park Lawn has spent an estimated $273 million on acquisitions since the merger. Each funeral group acquisition extends Homesteaders’ preneed influence.
While the company goes to pains to remind the world that it’s merely a minor Park Lawn stakeholder, reaping a modest return on a savvy investment, Homesteaders coincidentally sits atop a vertical integration funnel that transforms acquisitions into customers. This is the biggest change in the independent funeral home darling and (one supposes) why Shaffer is so hands-on as a minor investor, but more on that in a second.
Usually, when you invest in a company, you get dividends or equity over time in return. If the company gets sold, you get your money back with interest. If the company goes under, you don’t. If Park Lawn went out of business tomorrow, Homesteaders would still retain every preneed contract sold by any of the 300 or so Park Lawn properties. This has been a factor in record profits at Homesteaders in recent years. Think about it. If a funeral home company is worth $20 million on the regular market, what is its goodwill value? By those lights, every Park Lawn acquisition is a bargain for Homesteaders.
How Major is Minor?
It is the rare minority shareholder who gets to name the chairman of the board. It is also the rare minority shareholder who both ensures the company chooses a single-vendor model and demands to be that single vendor. It seems Homesteaders is no typical minority shareholder. And, as it turns out, Shaffer is no typical insurance company president, CEO, and chairman of the board.
Brad Green lasted 20 months as CEO under the Homesteaders umbrella. His replacement, Jennifer Hay, didn’t quite make it a year. Which brings us to the late bloodbath.
Last week, in addition to Hay, Mat Forastiere and Jay Dodds got the hook, ending the old “new” Park Lawn’s influence. Much has been made of the dismissal’s circumstances (the armed guards, the frog march), but it’s the fact of the matter that makes one wonder.
Homesteaders paid a 62% premium on the Park Lawn deal (about $250 million), but neither they nor Birch Hill assumed the $220 million debt on Park Lawn’s books at the time of the deal. That was rolled back into operations (which are now private and not reported on). At the time, Shaffer made a point to distance Homesteaders from Park Lawn’s pre-deal debt. Unfortunately, though, the upshot is that very debt continues to be a drag on the company’s investment.
Park Lawn has since added about 10 deals at the cost of something like $273 million (based on Park Lawn’s standard EBITDA model). If they’ve been able to maintain or even improve the free cash flow from before they went private, it’s probably something like (at the most) $30 - $40 million per year.
Homesteaders confirmed that none of the acquired properties had participated in its goodwill loan program, so there’s a real question about how well the debt has been handled at Park Lawn. That is, if Homesteaders and Birch Hill aren’t chipping in on these acquisitions, Park Lawn has doubled its pre-sale debt but only marginally increased its pre-sale free cash flow.
Homesteaders says they’re getting regular returns from the Park Lawn investment, and one imagines Birch Hill isn’t just in it for fun. You’ll recall the initial pitch was that if Homesteaders helped Park Lawn clear its debt, reliable profits would follow. Since Homesteaders didn’t clear Park Lawn’s debt, the only real change, it seems, is that both have been freed from public accountability.
Firing the three main dealmakers on the heels of a(n approximately) $90 million acquisition makes me wonder what operational promises were made and broken (or at least unachieved).
Whatever the case, Shaffer decided to put a money guy (Park Lawn CFO Markus Sturm) in the president’s chair and take over operations, elevating himself to executive director. Homesteaders said this is temporary during this “transition.” They also say they don’t have any material knowledge of Park Lawn’s operational workings.
Homesteaders reiterated that it achieved record profits last year and is on track this year to do the same. The question is whether they will pump those profits into Park Lawn or decide it isn’t a ship worth righting. And, in a final stunning coincidence, as of last week, Steve Shaffer is the man responsible for both ends of that equation.