In the Matter of 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

) 

SERVICE CORPORATION INTERNATIONAL, ) 

PUBLIC VERSION 

a corporation ) Docket No. C-4284 

and ) File No. 1010013 

KEYSTONE NORTH AMERICA, INC., ) 

a corporation. ) 

PETITION FOR APPROVAL OF PROPOSED DIVESTITURES 

TO FOUNDATION PARTNERS GROUP, LLC 

Pursuant to Section 2.41 of the Federal Trade Commission ("Commission") Rules of 

Practice and Procedure, 16 C.F.R. § 2.41(f) (2006), and Paragraph II.A of the Decision and 

Order contained in the Agreement Containing Consent Orders accepted for public comment in 

this matter ("Decision and Order"), Respondent Service Corporation International ("SCI") 

hereby petitions the Commission to approve the divestiture to Foundation Partners Group, LLC, 

a Delaware limited liability company ("Foundation") of the Divestiture Businesses that include 

the following facilities: 

• Sunset Vista Cemetery, Sunset Vista Funeral Home and Crematory, 11357 East 40th 

Street, Yuma, AZ 85367 

• Glen Haven Memorial Gardens, 7070 Houston Road, Macon, GA 31216 

• Kersey Funeral Home, 108 East Lake Stella Drive, Auburndale, FL 33823 

• Stewart Funeral Home, 1722 Mount Vernon Road, Vidalia, GA 30474 
PUBLIC VERSION 

• Jones-Stewart Funeral Home, 211 West Liberty Avenue, Lyons, GA 30436 

• Ronnie L. Stewart Funeral Home, 200 South Second Street, Glenwood, GA 30428 

• Boone Funeral Home, 2156 Airline Drive, Bossier City, LA 71111 

• Tiffany Funeral Home, 3232 West Saginaw Street, Lansing, MI 48917 

• Lambeth Troxler Funeral and Cremation Services, 300 West Wendover A venue, 

Greensboro, NC 27408 

• Hankins and Whittington Funeral Service, 1111 East Boulevard, Charlotte, NC 28203 

• T.J. McGowan Sons Funeral Home, 71 North Central Highway, Garnerville, NY 10923 

• T.J. McGowan Sons Funeral Home, 133 Broadway, Haverstraw, NY 10927 

• Claiborne Funeral Home, 1106 Highway 33 South, New Tazewell, TN 37825 

• Diuguid Funeral Service and Crematory, 811 Wiggington Road, Lynchburg, V A 24502 

• Diuguid Funeral Service and Crematory - Waterlick Chapel, 21914 Timberlake Road, 

Lynchburg, V A 24502 

• Shaw and Sons Funeral Directors, 201 North Second Street, Yakima, WA 98901 

• Mission Memorial Park and Seaside Funeral Home, 1915 Ord Grove Avenue, Seaside, 

CA 93955 

• Mission Mortuary, 450 Camino EI Estero, Monterey, CA 93940 

• Funeraria Latina-East, 6601 East Colfax Avenue, Denver, CO 80220 

• Kenneth Howe Funeral Home, 64 Maple Street, East Aurora, NY, 14052 

• Froehley-Dengler Funeral Home, 64 Maple Street, East Aurora, NY, 14052 

• Greenlawn Memorial Park and Funeral Home, 845 Leesburg Road, Columbia, SC 29209 

• Woodridge Memorial Park and Funeral Home, 138 Corley Mill Road, Lexington, SC 

29072 

The Divestiture Businesses associated with these facilities (as defined in the Decision 

and Order, and hereinafter collectively referred to as "Foundation Divestiture Assets") will be 

sold to Foundation pursuant to the Sale Agreement dated April 21, 2010 (the "Sale Agreement") 

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by and among Foundation and Keystone Group Holdings, Inc., Keystone America, Inc., Gila 

Mountain Development Co., Inc., Alderwoods Group (California), Inc., SCI Colorado Funeral 

Services, Inc., SCI Funeral Services of New York, Inc., TMJ Land, Inc., and SCI South Carolina 

Funeral Services, Inc ( "Sellers"). The executed Sale Agreement is attached as confidential 

Exhibit A. 

Background 

On March 5,2010, SCI and Keystone North America, Inc ("KNA") (collectively, the 

"Respondents"), executed an Agreement Containing Consent Orders that included the Decision 

and Order and Order to Hold Separate and Maintain Assets (collectively, the "Consent 

Agreement") to settle the Commission's charges that the proposed acquisition by SCI of KNA 

would violate Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.c. § 45, and 

Section 7 of the Clayton Act, as amended, 15 U.S.c. § 18. On March 26,2010, the Commission 

accepted the Consent Agreement for public comment, and SCI consummated its acquisition of 

KNA. KNA is now a wholly owned subsidiary of SCI. 

Because Confidential Exhibit A to this petition contains confidential and competitively 

sensitive business information relating to the divestiture of the Foundation Divestiture Assets -

the disclosure of which may prejudice Respondents and Foundation, cause harm to the ongoing 

competitiveness of the Foundation Divestiture Assets, and impair the Respondents' ability to 

comply with their obligations under the Consent Agreement - the Respondents have redacted 

Confidential Exhibit A from the public version of this petition. Pursuant to Sections 2.41(f)(4) 

and 4.9(c) of the Commission's Rules of Practice and Procedure, 16. c.F.R. §§ 2.41(f)(4) and 4.9 

(c), the Respondents request that the confidential version of this petition and the information 

contained herein be accorded confidential treatment under 5.U.S.C. § 552 and Section 4.1O(a)(2) 

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of the Commission's Rules of Practice and Procedure, 16 C.FR. § 4.1O(a)(2) (2006). The 

confidential version of this petition is also exempt from disclosure under Exemptions 4, 7(A), 

7(B), and 7(C) of the Freedom oflnformation Act, 5 U.S.c. §§ 552(b)(4), 552(b)(7)(A), 

552(b)(7)(B), & 552(b)(7)(C), and the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 

as amended, 15 U.S.c. § 18a(h). 

SCI desires to complete the proposed divestiture of the Foundation Divestiture Assets as 

soon as possible, following Commission approval thereof. All conditions other than 

Commission approval, any required state regulatory approval, and landlord consents, have 

already been satisfied, so that Foundation and Sellers are in a position to close the divestiture 

within a few days of such approval. 

Prompt consummation will further the purposes of the Decision and Order and is in the 

interests of the public, Foundation, and the Respondents, because it will allow Foundation to 

move forward with its business plan for the competitive operation of the Foundation Divestiture 

Assets. SCI accordingly requests that the Commission promptly commence the period of public 

comment pursuant to Section 2.41 (f)(2) of the Commission's Rules of Practice and Procedure, 

16 c.F.R. § 2.41(f)(2) (2006), limit the public comment period to the customary 30-day period, 

and grant this petition by approving the divestiture of the Foundation Divestiture Assets to 

Foundation pursuant to the above-referenced Sale Agreement as soon as practicable after the 

close of the public comment period. 

I. The Sale Agreement Is Final and Consistent with the Decision and Order's Terms 

Paragraph II.A of the Decision and Order requires the Respondents to divest the 

Divestiture Businesses (as defined in the Decision and Order) within 90 days of March 26,2010, 

the date on which SCI completed its acquisition of KNA. Anticipating that divestitures would be 

required, during the months preceding the Commission's approval of the Consent Agreement, 

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SCI diligently sought a buyer that would be acceptable to the Commission. During this process, 

SCI made information about assets to be divested available to a number of entities that were 

interested in acquiring some or all of the assets, and SCI engaged in discussions with several 

interested buyers. On April 21, 20lO, Sellers and Foundation entered into the Sale Agreement 

(attached hereto as Confidential Exhibit A). 

The Sale Agreement with Foundation complies with the requirements of Paragraph II of 

the Decision and Order. Paragraph II.A requires that Respondents divest the Foundation 

Divestiture Assets, absolutely and in good faith, at no minimum price. Foundation will acquire 

the Foundation Divestiture Assets pursuant to Section 1.1 of the Sale Agreement. 

* * * 

As demonstrated above and in the accompanying Sale Agreement, Sellers have entered 

into an agreement relating to the sale of the Foundation Divestiture Assets that fully complies 

with the Commission's Decision and Order. Respondents accordingly hereby seek Commission 

approval of the proposed divestitures pursuant to paragraph II.A of the Decision and Order. 

II. The Proposed Acquirer Will Be a Strong and Effective Competitor 

Foundation's management team has extensive experience in acquiring and operating 

funeral homes and cemeteries and, with the support of Sterling Partners, will possess the 

financial wherewithal to complete the acquisition and operate the Divestiture Businesses 

successfully. The acquisition will assure that the Divestiture Businesses remain strong and 

effective competitors in Yuma, Arizona; Monterey and Seaside, California; Denver, Colorado; 

Auburndale, Florida; Glenwood, Lyons, Macon and Vidalia, Georgia; Bossier City and 

Shreveport, Louisiana; Lansing, Michigan; East Aurora, Garnerville and Haverstraw, New York; 

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Charlotte and Greensboro, North Carolina; Columbia and Lexington, South Carolina; New 

Tazewell, Tennessee; Lynchburg, Virginia; and Yakima, Washington. 

Background 

Foundation is a newly formed portfolio company of Sterling Partners ("Sterling") and 

was formed by Sterling and certain founders and former senior executives of KNA for the 

purpose of acquiring and operating the Divestiture Businesses. The Foundation management 

team has more than 70 years of collective experience in the funeral home industry, and 

previously managed many of the Divestiture Businesses owned by KNA. In fact, while 

employed by KNA, the members of the Foundation management team were ultimately 

responsible for 16 of the 22 Divestiture Businesses, and have thorough knowledge of those 

operations and the markets in which they operate. The Foundation management team also 

managed KNA's businesses in the remaining market areas in which SCI businesses are being 

divested. Foundation anticipates leveraging the experience of its management team and 

Sterling's financial resources and expertise to build a national funeral home and cemetery 

company that offers a full range of funeral and cemetery services on both an at-need (at time of 

death) and a pre-need (prior to death) basis. These services will include removal of human 

remains, planning and coordinating personalized funerals and cremations, professional 

embalming, use of Foundation's funeral home facilities, merchandise sales, conducting memorial 

services, performing cremations, and cemetery interment services. 

Sterling has a 26-year history of building, growing and managing companies. It 

consistently drives accelerated growth across its portfolio companies and delivers top decile 

returns to its investors. Sterling has approximately $4 billion in assets under management across 

a portfolio of leading education, healthcare and business service companies. It has an 

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international presence with offices in the United States, New Delhi and Mexico City. Despite 

recent market turbulence, Sterling has remained an active investor, completing five transactions 

in 2009. 

Sterling Partners and Foundation do not presently have assets that compete with the 

Divestiture Businesses in the markets defined by the Commission in its Complaint. 

As discussed more fully below under "Operations Experience," the Foundation 

management team has extensive experience in the industry and a proven track record of success. 

Together, Sterling and the Foundation management team expect to operate a robust business that 

is competitive with SCI in the markets served by the Divestiture Businesses. 

Financial Capability 

Sterling, through Sterling Capital Partners III, LP, a $1 billion fund, has committed up to 

$60 million to Foundation for future operations and expansion, including the acquisition of the 

Divestiture Businesses. The funds required to consummate the acquisition of the Divestiture 

Businesses are immediately available and the Sale Agreement contains no financing 

contingency. Sterling anticipates being in a position to fund Foundation and close the 

acquisition promptly upon satisfaction of all required conditions to closing. 

Operations Experience 

Foundation's management team is led by a group of seasoned industry professionals with 

extensive experience in owning, operating and acquiring funeral homes. The executive 

management team is led by founders and former senior executives of KNA who previously 

managed many of the Divestiture Businesses. The Management Team members collectively 

have over 70 years experience successfully acquiring, integrating and managing funeral 

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businesses. In addition, they are intimately familiar with many of the Divestiture Businesses and 

the markets in which they operate. The senior members of Foundation's management are: 

Stephen Shaffer (CEO; 22 years experience): Mr. Shaffer has served as Chief Financial 

Officer of KNA since its inception and was previously Corporate Controller of Prime Succession 

prior to its sale. Mr. Shaffer was employed as an auditor with Ernst & Young in Indianapolis 

from 1987 to 1994. While working as a CPA at Ernst & Young, Mr. Shaffer's audit clients 

included two cemetery and funeral consolidation companies, Gibraltar Mausoleum Corporation 

and Prime Succession. Mr. Shaffer graduated in 1987 from Indiana University School of 

Business, Bloomington, Indiana with a Bachelor of Science in Accounting. 

James Price (COO and EVP; 45 years experience): Mr. Price is KNA's Chief Operating 

Officer. Mr. Price previously served (in reverse chronological order) as President and CEO of 

Bonny-Watson, a large Seattle based funeral horne and cemetery company; Southern Regional 

Vice President at Prime Succession, Inc.; Regional Vice President for SCI; and Operations Vice 

President at Pierce Brothers Holding Company. He also worked as an area manager at IPS and a 

manager of a local funeral horne. Mr. Price is a graduate of the California College of Mortuary 

Science, Mira Costa College. He is a licensed Funeral Director and Embalmer in California (he 

is the third generation in his family to serve as a funeral director) and holds a National Board 

Certificate. Mr. Price is an active member of the National Funeral Directors Association, the 

Cremation Association of North America, the Death Care Management Council, and the 

International Cemetery, Cremation, and Funeral Association. 

Chris Thornley (CFO; 10 years experience): Mr. Thornley is Chief Accounting Officer of 

KNA, where he was previously Financial Controller. Between 1998 and 2000, he was employed 

at Ernst & Young, where he progressed to Senior Auditor. He graduated with honors with a 

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Bachelor of Science in Accounting and a Master of Accounting from the University of Florida at 

Gainesville. He is a member of the American Association of Certified Public Accountants and 

the Florida Institute of Certified Public Accountants, and scored in the top ten in the state of 

Florida on the May 1998 CPA exam. 

These individuals constitute a strong and highly experienced senior management team 

that has operated together from KNA's inception in 1996 until the formation of Foundation in 

2010. Prior to founding KNA in 1996, Steve Shaffer and Jim Price worked together for two 

years at a previous company. Together they ensure that Foundation is a qualified buyer for the 

Divestiture Businesses. 

Foundation management has extensive experience completing and coordinating quick, 

effective transitions of acquired businesses. In their experience at KNA, management was 

involved in over 90 acquisitions of businesses of various sizes and effectively integrated those 

businesses into KNA. These acquisitions ranged from single funeral home and cemetery 

transactions to transactions involving up to 87 operating units. 

Foundation believes that keeping good personnel helps ensure the continuity of the 

business, allowing Foundation to compete effectively in each market from the date of acquisition 

forward. Foundation takes pride in its ability to be financially competitive while maintaining the 

local staff, which contributes to the long-term success of each business. As a result, consistent 

with its business model, Foundation anticipates offering employment to most, if not all, of the 

employees currently employed at the Divestiture Businesses, on terms and at compensation 

roughly equivalent to their existing compensation. Additionally, the familiarity and comfort of 

location personnel with the management style and leadership of the Foundation management 

team will enhance the ability of the Divestiture Businesses to continue to compete effectively. 

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SCI has agreed in the Sale Agreement not to solicit the employment of any such employee hired 

by Foundation for a period of two years following closing, as required by Paragraph III of the 

Decision and Order. 

The foregoing demonstrates that Foundation has the resources, operating expertise and 

commitment to its business to not only ensure the continued competitiveness of the Divestiture 

Businesses, but to enhance their competitiveness and grow market share over time. 

III. The Proposed Divestiture Will Achieve the Purposes of the Decision and Order and 

Result in No Harm to Competition 

The proposed divestiture of the Foundation Divestiture Assets, as embodied in the Sale 

Agreement, will achieve the purposes of the Decision and Order. The members of the 

Foundation management team are experienced operators of funeral homes and cemeteries, with a 

proven track record of successfully operating and enhancing the funeral homes and cemeteries 

they have acquired in the past. With funding from Sterling, Foundation enjoys a strong financial 

position that will enable it to complete this acquisition, continue the operation of the Foundation 

Divestiture Assets, and enhance their competitiveness in the market for funeral and cemetery 

services. Combining the Foundation Divestiture Assets with the experience of the Foundation 

management team and the financial resources provided by the Sterling funding will ensure that 

the objectives of the Decision and Order will be realized. 

The proposed divestiture will result in no harm to competition. Foundation does not 

currently compete in any market, as defined in the Commission's Complaint, in which the 

Foundation Divestiture Assets operate. Consequently, there is no overlap between the operations 

of Foundation and the Foundation Divestiture Assets, and the proposed divestiture does not raise 

any competitive issues. 

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In sum, the proposed divestiture will remedy any anticompetitive effects that could result 

from the acquisition. The Sale Agreement will achieve the Commission's stated purposes of 

ensuring the continued use of the Foundation Divesture Assets in the same business in which 

they were engaged at the time of the announcement of the proposed acquisition and remedying 

the lessening of competition alleged in the Commission's Complaint. 

Conclusion 

For the foregoing reasons, the Respondents respectfully request that the Commission 

approve the proposed divestiture of the Foundation Divestiture Assets to Foundation, as 

embodied in the Sale Agreement with Foundation, as soon as practicable after the expiration of 

the public comment period. 

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Respectfully Submitted 

R. Weiss 

Gates LLP 

1601 K St. NW 

Washington, D.C. 20006 

(202) 661-6225 

Counsel for 

Respondents 

Dated: April 2010 
CERTIFICATION OF SERVICE CORPORATION INTERNATIONAL 

The facts and information related in the foregoing Petition, insofar as they pertain to Service 

Corporation International and its assets, are, to the best of my knowledge, true, correct, and 

complete. 

Pursuant to 28 U.S.C. §1746, I certify under penalty ofperjury under the laws of the United 

States of America that the foregoing is true and correct. 

egory T. S galis 

Senior Vice esident, Corporate Secretary, and General Counsel 

Service Corporation International 
CERTIFICATION OF FOUNDATION PARTNERS GROUP, LLC 

The facts and information related in the foregoing Petition, insofar as they pertain to Foundation 

Partners Group and its assets, are, to the best of my knowledge, true, correct, and complete. 

Pursuant to 28 U.S.C. § 1746, I certify under penalty of perjury under the laws of the United 

States of America that the foregoing is true and correct. 

jJq;11+-· S'fephen M Shaffe; 

Chief Executive Officer 

Foundation Partners Group, LLC 
EXHIBIT A 

[REDACTED FROM THE PUBLIC VERSION]