By Thomas A. Parmalee
When Will Andrews left his job at Batesville, most people were surprised.
That he was leaving not to join another supplier but to serve as president of a new privately owned consolidator of funeral homes and cemeteries only turned the surprise into – for some – a level of shock.
But Andrews, who left Batesville after more than 20 years, says the opportunity to join Anthem Partners was too good to pass up. It was also a natural move that allowed him to leverage his considerable talents.
“Most of my work with Batesville was around supporting funeral homes through consulting and not actually selling products,” he explained. “Thus, I was well versed in HR, legal, finance, community outreach and marketing of funeral homes.”
In short, he paid no mind to the naysayers who raised their eyebrows when he announced his move.
“There are many executives within our industry without a funeral background who are very successful due to their business sense,” he said. “I really felt like I could bring the knowledge gained at working for a major corporation, plus the learning of the good and bad transitions of some of the consolidators within the space, and merge that with my leadership capabilities.”
So far, what some may have perceived as a gamble, has paid off: Three years after opening for business, Anthem Partners has more than 70 locations in five states and three Canadian provinces and is on a trajectory to enjoy steady growth.
The company began when it acquired its first seven locations in Central California before making large acquisitions in Canada, Tennessee, California, Arkansas, New Mexico and Nevada. “After the first 12 months, we were at around 50 locations and acquired the rest in year two,” Andrews said. “Year three has been about effectively integrating our operations and working on being a world-class operation company.”
We recently caught up with Andrews to learn how he made the transition from being a Batesville legend to becoming the president of Anthem, along with his goals for the future.
Tell us a little bit about yourself.
I am married to my college sweetheart, Courtney, and we have three wonderful daughters, Ellie, Sydney and Mallory. We live in Frisco, Texas, and I suffer through being a diehard fan of Auburn University, the Dallas Cowboys and FC Barcelona. I love to travel, whether to Europe or Disney with my girls. I also love exploring the world of wine, while also watching a lot of sports.
Many people were very surprised when you left Batesville. What led you to leave?
I had always wanted the opportunity to sit on the other side of the desk. I had worked so closely with many of the top operators in funeral service and wanted to try my hand at it. It was very difficult to leave my Batesville family, but the timing was perfect for accepting this opportunity.
When you got out of college and began looking for a job, did you actively seek out a job in death care?
I actually just answered an advertisement in a local paper back home in Alabama for “vault sales” with Vantage Vault. I got a sales territory covering Alabama and Mississippi for them. It was the perfect job right out of college, staying in hotels and traveling the South was a lot of fun. After a year with Vantage, I got the opportunity to work for Batesville and after attending some conventions, I knew they were the company to work for within the industry, at that time.
You made a big mark in the profession at Batesville, rising to division vice president of sales. What did you like most about that job?
No doubt it was the customers. Getting to know funeral directors and business owners across North America was fantastic. I never pictured myself ever having much reach outside of the South and traveling to the West Coast, Canada, New York, etc. was so exciting. Understanding their businesses and forging personal relationships that have lasted over the years is something that I cherish very much.
Who were your biggest mentors at Batesville – what did you learn from them?
I had many over the years in multiple capacities, but Ray Armstrong and John Schutte would be the two that really stood out. Ray taught me to not back down from my opinions. If I believed something was best for the customer, to stand firm and not just be an order taker. Schutte taught me to be authentic and not lose “who I am” no matter the situation. His passion for the company, employees and customers was greater than anyone I ever worked with during my tenure in the profession. He cared so much and with every decision he made, he would weigh its impact on those around him.
What is the Anthem-wide cremation rate and how does that compare with the average of the states you are in?
Anthem’s cremation rate varies substantially from locations at over 80% in Canada/California to some in the 40% range in Tennessee. We typically are very consistent with the markets we participate in.
What does your acquisition pipeline look like – and what do you look for when deciding whether to consider buying a firm?
Our pipeline is very robust. The challenge coming out of COVID is the valuation process. Balancing the spike from COVID with the tightness of the market is challenging. We like to look for a group of firms within a market. These regional consolidators give us the ability to draw efficiencies within the group. That along with our corporate buying power allows us to enhance profitability without making wholesale changes at the local level. After we establish a presence in the market, we will add “bolt-on” acquisitions within geographies that are already in play. One of the greatest compliments we receive is when a local funeral home approaches us about buying their firm because of the positive things they have heard from our employees.
How challenging has it been to operate in a high interest rate and high inflationary environment? What have you had to adjust?
This has caused us to slow down and effectively integrate the operations at the firms we have acquired. With the cost of capital being higher, we have used this time to focus on streamlining operations until rates begin to soften. We have been able to offset inflation substantially due to our buying power and size. We grew at the right time to begin to negotiate better terms with our vendors and partners. That all being said, we have had to look at passing along some of the rising costs on to the families we serve.
Is there ever a chance that Anthem would go public?
There is the possibility of us going public, and we have had a substantial amount of interest in an IPO. We do prefer seeking investors with longer-term/forever-hold approaches to the businesses they invest in. We know this is a very personal business and there are many advantages to being private. In the end, whether we go public or stay private, we want to choose the path that is best for our employees, shareholders and the communities we serve.
What are some of the most important lessons you have learned over the past few years running Anthem? What did you wish you knew starting out that you know now?
The most important lesson is to grow deliberately. Whenever you start an endeavor such as Anthem, you want to grow as quickly as possible. It is hard to walk away from deals when people want to sell their business to you, but sometimes the best deals are the ones you walk away from. Growing fast leads to a lot of growing pains. Building the infrastructure to support that growth is vitally important. Patience is paramount. Also, don’t feel like you must be the expert. I am not a licensed funeral director, embalmer or celebrant, and that is OK, as we have great people in all those areas. Being curious is the key to success and not a sign of weakness. Not being the expert gives you the ability to support more thoroughly without prejudice. Lastly, keeping decisions as close to the field as possible is best for everyone. The more you empower your local people, the better the families you serve are treated.
What makes the Anthem Partners culture so special?
Our organization has a bottom-up mentality when it comes to processes, procedures and decisions. Thus, we try to empower our people to create our operations manual versus us pushing down to them how to handle themselves. Our leadership team is constantly going on “listening tours” where we try to understand the challenges in the field and with our team. We try to constantly listen to those closest to the families we serve.
What do you see as your biggest challenges at Anthem moving forward – what about the biggest opportunities?
The biggest challenges going forward are on the financial side. Ensuring we get our valuations correct on acquisitions is tough in a market with as much volatility as the current one. Continuing to right-size our organization to ensure we have the right mix of employees so that we can be agile as the market shifts is also very important. We are also going to be challenged by the same factors as many other businesses across all industries, such as inflation, retaining top talent and the cost of capital.
Our biggest opportunities revolve around our reputation and the fact that we aren’t viewed as “corporate” – yet. I know the larger we become, the more that moniker will apply, but many sellers are looking at us as the protector of their legacy. We have bid on many businesses in our first three years and often win the bid with a lower bid than the other consolidators, mainly due to our reputation and our little to no-disruption policy. We also have a lot of opportunities around the changing industry as many great operators are looking to sell but stay on in the business. They are tired of the HR, finance and technological aspects of their business. We can take care of those items while they continue to focus on families within their communities.