Service Corporation International to Acquire Alderwoods Group, Inc. Combining The Two Premier Funeral and Cemetery Services Providers in North America

Expected to Generate $60 - $70 Million in Cost Savings and Provide Broader

Platform for SCI's Product and Marketing Strategies

Expected to be Immediately Accretive to SCI's Cash Flow and Accretive to

Earnings Per Share in 2007

Transaction Builds on Both Companies' Operating Excellence

and Community Commitment

Apr 03, 2006, 01:00 ET from Service Corporation International

    HOUSTON and CINCINNATI, April 3 /PRNewswire-FirstCall/ -- Service
 Corporation International (NYSE:   SCI) ("the Company") and Alderwoods Group,
 Inc. (Nasdaq:   AWGI) today announced that the Boards of Directors of both
 companies have approved a definitive agreement under which SCI will acquire
 all of the outstanding shares of Alderwoods for $20.00 per share in cash.  The
 transaction is valued at $856 million.  In addition, approximately $374
 million of Alderwoods debt will remain outstanding or be refinanced.
     This transaction combines two of the leading providers of funeral and
 cemetery services in North America.  With Alderwoods, SCI would have revenues
 of approximately $2.5 billion (based on 2005 financial results), and an
 expanded geographic footprint which would include a network of 1,712 funeral
 homes and 490 cemeteries (of which 243 are combination funeral homes and
 cemeteries) in 48 states, eight Canadian provinces and Puerto Rico.
     "This is the right transaction at the right time and is consistent with
 our objectives to expand scale and scope, and our focus on disciplined growth
 initiatives that generate increased revenues, profitability and cash flow
 margins," said Tom Ryan, Service Corporation International's President and
 Chief Executive Officer.  "In recent years, we have strengthened our balance
 sheet, lowered our cost structure, introduced more efficient systems and
 processes, and redirected our management team to provide a new foundation for
 growth.  This transaction will provide us with the ability to serve a number
 of new, complementary areas, while enabling us to capitalize on significant
 synergies and operating efficiencies.  Together with Alderwoods, we will
 further enhance our operating expertise and customer, product and marketing
 strategies across an expanded geographic footprint."
     Paul A. Houston, President and Chief Executive Officer of Alderwoods
 Group, Inc., said: "During the past few years, we have restructured our
 company to create a more efficient operating structure, introduce innovative
 products and services, reduce debt and improve Alderwoods's financial
 flexibility.  Today's announcement is consistent with our objective of
 maximizing shareholder value.  In addition, we expect our employees to benefit
 from being part of a larger, more diversified organization that is equally
 dedicated to their success."
     Robert L. Waltrip, Chairman of Service Corporation International, said:
 "Alderwoods is an ideal strategic partner for us, and this combination
 positions SCI for continued growth and leadership in the highly fragmented
 industry in which we operate.  From an industry perspective, both SCI and
 Alderwoods have a strong reputation for providing families with professional
 and compassionate service.  We look forward to building on this shared
 commitment and intend to maintain the strong personal relationships that have
 been developed over the years in the many communities we serve throughout the
 United States, Canada and Puerto Rico. On behalf of SCI, we look forward to
 working with the employees of Alderwoods to grow our business."
     Benefits of the Transaction
     -- Ongoing cost saving synergies.  Excluding one-time costs of
        approximately $60 million, the transaction is expected to generate
        annual pre-tax cost savings of approximately $60-$70 million within 12
        to 18 months after closing.  Savings are expected to come largely from
        shared corporate and administrative areas and rationalizing duplicative
        expenses for information technology, legal and back-office functions.
        Significant workforce reductions at the operating level are not
     -- Significant cash flows and financial flexibility.  Both SCI and
        Alderwoods benefit from strong operating cash flows.  After one-time
        implementation costs and the full realization of synergies, the
        Company expects annualized cash flow from operations to total
        approximately $400 million, excluding insurance segment cash flow. This
        compares with SCI's current cash flow expected in 2006 of $295-$315
        million.  The Company expects to maintain a balanced approach of
        investing in its business and returning capital to shareholders while
        also supporting a prudent capital structure.
     -- Accretive to cash flow and earnings. SCI expects the transaction to be
        immediately accretive to the Company's cash flow, excluding one-time
        implementation costs.  The Company also expects that within the first
        12 to 24 months after closing the transaction will be accretive to
        earnings per share, excluding one-time implementation costs.
     -- Expanded geographic footprint in new, complementary areas.  With
        Alderwoods, SCI will serve many new areas throughout the U.S., Canada
        and Puerto Rico, providing the Company with a larger platform from
        which to implement its multi-brand strategy, featuring its Dignity
        Memorial(R) network.  Additionally, an expanded geographic footprint
        will offer customers enhanced transferability of preneed funeral and
        cemetery needs.
     -- Customer strategy.  SCI is transitioning from the industry's
        traditional one-size-fits-all approach to a flexible operating and
        marketing strategy that recognizes customers' personal needs and
        preferences.  With the addition of Alderwoods, the Company will have a
        broader platform upon which to accelerate its product and marketing
        strategies.  By utilizing the best practices and processes of both
        companies, SCI believes it can achieve even higher levels of customer
        satisfaction and loyalty.
     SCI currently has $470 million in cash on its balance sheet, the company
 intends to fund the transaction in all cash. SCI has received a commitment
 letter from JPMorgan for an $850 million bridge facility. The Company also
 believes it has access to a number of debt capital markets and will determine
 an optimal funding structure prior to the close of the transaction.
     Dividend Policy and Share Repurchase Program
     It is currently anticipated that SCI will continue its regular quarterly
 cash dividends. However, declarations of dividends are determined by the Board
 of Directors each quarter after its review of the Company's financial
     Since August 2004, SCI has repurchased 47.7 million of its shares at an
 average price of $7.03, for a total of $335.4 million. SCI currently has an
 additional $64.6 million previously authorized by the Board under its existing
 share repurchase program.
     Approvals and Path to Closing
     The transaction is subject to approval by the shareholders of Alderwoods
 and the satisfaction of customary closing conditions and regulatory approvals,
 including expiration or termination of the applicable waiting period under the
 Hart-Scott-Rodino Antitrust Improvements Act of 1976.  The transaction is
 expected to close by the end of the 2006 calendar year and is not subject to
 any financing conditions.
     In connection with the transaction, JPMorgan is acting as financial
 advisor to SCI and Wachtell, Lipton, Rosen & Katz is serving as its legal
 counsel.  Bear Stearns & Co. Inc. provided a fairness opinion to Alderwoods
 and is acting as its financial advisor, and Jones Day is serving as its legal
     Analyst/Investor Conference Call and Webcast
     SCI will hold a conference call and webcast today at 10 a.m. Eastern Time
 / 9 a.m. Central Time to discuss this morning's announcement.  Presentation
 materials can be accessed through the SCI website at
 To participate in the call, dial 866-425-6195, conference code 7228099.
 International callers should dial 973-935-2981.  The call will also be
 simultaneously webcast on the Company's website at
     A replay of the conference call will be available through April 10, 2006
 and can be accessed at 877-519-4471 with the confirmation code of 7228099.
 Additionally, a replay of the conference call will be available on SCI's
 website for approximately ninety days on the Investors page under the
 subheading "Conference Calls" at This
 press release will also be available on SCI's website on the Investor
 Relations page under the subheading "News" at
     About Service Corporation International
     Service Corporation International, headquartered in Houston, Texas, is the
 leading provider of funeral and cemetery services in the world.  The Company
 an extensive network of businesses including 1,058 funeral service locations
 and 358 cemeteries in North America as of December 31, 2005.  For more
 information about Service Corporation International, please visit
     About Alderwoods Group, Inc.
     Alderwoods Group, Inc. is the second largest operator of funeral homes and
 cemeteries in North America, based upon total revenue and number of locations.
 As of December 31, 2005, Alderwoods operated 594 funeral homes, 72 cemeteries
 and 60 combination funeral home and cemetery locations throughout North
 America.  Alderwoods provides funeral and cemetery services and products on
 both an at-need and pre-need basis. In support of the pre-need business,
 Alderwoods operates insurance subsidiaries that provide customers with a
 funding mechanism for the pre-arrangement of funerals.  For more information
 about Alderwoods, please visit
     Cautionary Statement on Forward-Looking Statements
     Forward-Looking Statements
     Information set forth in this release contains forward-looking statements,
 which involve a number of risks and uncertainties. Service Corporation
 International ("SCI") and Alderwoods Group, Inc. ("Alderwoods") caution
 readers that any forward-looking information is not a guarantee of future
 performance and that actual results could differ materially from those
 contained in the forward-looking information. Such forward-looking statements
 include, but are not limited to, statements about the benefits of the business
 combination transaction involving SCI and Alderwoods, including future
 financial and operating results, the combined company's plans, objectives,
 expectations and intentions and other statements that are not historical
     The following factors, among others, could cause actual results to differ
 from those set forth in the forward-looking statements: the ability to obtain
 regulatory approvals of the transaction on the proposed terms and schedule;
 the failure of Alderwoods stockholders to approve the transaction; the risk
 that the businesses will not be integrated successfully; the risk that the
 cost savings and any other synergies from the transaction may not be fully
 realized or may take longer to realize than expected; disruption from the
 transaction making it more difficult to maintain relationships with customers,
 employees or suppliers. Additional factors that may affect future results are
 contained in SCI's and Alderwoods's filings with the SEC, which are available
 at the SEC's web site SCI and Alderwoods disclaim any
 obligation to update and revise statements contained in these materials based
 on new information or otherwise.
     Additional Information About this Transaction
     In connection with the proposed transaction, Alderwoods will file a proxy
 be able to obtain the proxy statement, as well as other filings containing
 information about Alderwoods and SCI, free of charge, at the website
 maintained by the SEC at  Copies of the proxy statement and other
 filings made by the Company with the SEC can also be obtained, free of charge,
 by directing a request to Alderwoods Group, Inc., 311 Elm Street, Suite 1000,
 Cincinnati, Ohio 45202, Attention: Corporate Secretary.  Filings made by SCI
 with the SEC can also be obtained, free of charge, by directing a request to
 Service Corporation International, 1929 Allen Parkway, Houston, Texas 77019,
 Attention: Corporate Secretary.
     Participants in the Solicitation
     The directors and executive officers of Alderwoods and SCI and other
 persons may be deemed to be participants in the solicitation of proxies in
 respect of the proposed transaction.  Information regarding Alderwoods'
 directors and executive officers is available in its annual proxy statement
 filed with the SEC on April 5, 2005.  Information regarding SCI's directors
 and executive officers is available in its annual proxy statement filed with
 the SEC on April 18, 2005.  Other information regarding the participants in
 the proxy solicitation and a description of their direct and indirect
 interests, by security holdings or otherwise, will be contained in the proxy
 statement and other relevant materials to be filed with the SEC when they
 become available. Investors should read the proxy statement carefully when it
 becomes available before making any voting or investment decisions.
      Service Corporation International Contacts
       Debbie Young - Director / Investor Relations
       (713) 525-9088
       Greg Bolton - Director / Corporate Communications
       (713) 525-5235
       Steve Frankel / Jamie Moser
       Joele Frank, Wilkinson Brimmer Katcher
       (212) 355-4449
     Alderwoods Group, Inc. Contacts
      Investors / Media:
       Kenneth A. Sloan - Executive Vice President, Chief Financial Officer
       (416) 498-2455

SOURCE Service Corporation International