Dignity, the UK's largest listed funeral provider, has agreed to be taken over in a deal valuing it at £281m.
The company is being bought by a consortium of investment firms led by Sir Peter Wood, the founder of the insurers Direct Line and esure, and Gary Channon, Dignity's former chief executive.
Dignity, which operates from more than 700 locations but is behind the Co-op in terms of market share, has seen its profits squeezed in recent years by a growing preference among consumers for cheap, no-frills funerals.
The company said SPWOne V, Castelnau and Phoenix Asset Management Partners offered 550 pence-per-share in cash following several unsolicited offers received last year.
The terms represented a premium of 29.3% to the 3 January closing price of 425.5p before the offer period commenced.
The consortium, which already owned or controlled about 29% of Dignity, said in a joint statement that the funeral service provider would get significant investment under private ownership.
The deal includes the option for Dignity shareholders to stay invested in the company through an unlisted share alternative in Valderrama, an indirect parent company of bidding company Yellow Bidco Ltd, or a listed share alternative in Castelnau.