Matthews International to Sell SGK Brand Solutions
Matthews International (MATW) has announced the sale of its SGK Brand Solutions division to a newly formed entity created by SGS & Co affiliates. The deal structure includes $350 million in upfront consideration, comprising $250 million in cash, $50 million in preferred equity, and $50 million in retained trade receivables. Matthews will also receive a 40% stake in the new entity's common equity.
The new entity, valued at approximately $900 million, represents a 9x adjusted EBITDA multiple. It is expected to achieve over $50 million in annual cost synergies over a 30-month integration period. Matthews will retain its German roto-gravure packaging business and related investments. The immediate cash proceeds will be used primarily for debt reduction. The transaction is expected to complete in mid-2025, subject to regulatory approvals.
Matthews International (MATW) ha annunciato la vendita della sua divisione SGK Brand Solutions a un'entit脿 recentemente formata dai soci di SGS & Co. La struttura dell'accordo prevede 350 milioni di dollari in considerazione iniziale, suddivisi in 250 milioni di dollari in contante, 50 milioni di dollari in equity preferita e 50 milioni di dollari in crediti commerciali mantenuti. Matthews ricever脿 anche una partecipazione del 40% nell'equity comune della nuova entit脿.
La nuova entit脿, valutata circa 900 milioni di dollari, rappresenta un multiplo di EBITDA rettificato di 9 volte. Si prevede che raggiunga oltre 50 milioni di dollari in sinergie annuali di costo nel corso di un periodo di integrazione di 30 mesi. Matthews manterr脿 la sua attivit脿 di imballaggio rotocalco in Germania e investimenti correlati. I proventi immediati in contante saranno utilizzati principalmente per la riduzione del debito. Si prevede che la transazione si completer脿 a met脿 del 2025, soggetta alle approvazioni regolatorie.
Matthews International (MATW) ha anunciado la venta de su divisi贸n SGK Brand Solutions a una entidad reci茅n formada creada por afiliados de SGS & Co. La estructura del acuerdo incluye 350 millones de d贸lares en consideraci贸n inicial, que comprenden 250 millones de d贸lares en efectivo, 50 millones de d贸lares en capital preferente y 50 millones de d贸lares en cuentas por cobrar mantenidas. Matthews tambi茅n recibir谩 una participaci贸n del 40% en el capital com煤n de la nueva entidad.
La nueva entidad, valorada en aproximadamente 900 millones de d贸lares, representa un m煤ltiplo de EBITDA ajustado de 9 veces. Se espera que logre m谩s de 50 millones de d贸lares en sinergias de costos anuales durante un per铆odo de integraci贸n de 30 meses. Matthews mantendr谩 su negocio de embalaje rotogravado en Alemania y las inversiones relacionadas. Los ingresos inmediatos en efectivo se utilizar谩n principalmente para la reducci贸n de deuda. Se espera que la transacci贸n se complete a mediados de 2025, sujeta a las aprobaciones regulatorias.
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靸堧鞖 氩曥澑鞚 鞎 9鞏 雼煬搿 韽夑皜霅橂┌, 臁办爼霅 EBITDA鞚 9氚办棎 頃措嫻頃樀鐢 靾橃箻鞛呺媹雼. 30臧滌洈鞚 韱淀暕 旮瓣皠 霃欖晥 鞐瓣皠 5觳滊 雼煬 鞚挫儊鞚 牍勳毄 鞁滊剤歆毳 雼劚頃 瓴冹溂搿 旮半寑霅╇媹雼. 毵ろ姕鞀さ鐢 霃呾澕鞚 搿滍啝攴鸽灅牍勳柎 韽灔 靷梾瓿 甏霠 韴瀽霌れ潉 鞙犾頃 瓴冹瀰雼堧嫟. 歃夑皝鞝侅澑 順勱笀 靾橃澋鞚 欤茧 攵毂 臧愳稌鞐 靷毄霅 瓴冹瀰雼堧嫟. 瓯半灅电 2025雲 欷戨皹鞐 鞕勲霅 鞓堨爼鞚措┌, 攴滌牅 鞀轨澑鞐 霐半澕 雼澕歆 靾 鞛堨姷雼堧嫟.
Matthews International (MATW) a annonc茅 la vente de sa division SGK Brand Solutions 脿 une entit茅 r茅cemment form茅e par les affili茅s de SGS & Co. La structure de l'accord comprend 350 millions de dollars en contrepartie initiale, comprenant 250 millions de dollars en num茅raire, 50 millions de dollars en actions privil茅gi茅es et 50 millions de dollars en cr茅ances commerciales conserv茅es. Matthews recevra 茅galement une participation de 40% dans l'茅quit茅 commune de la nouvelle entit茅.
La nouvelle entit茅, 茅valu茅e 脿 environ 900 millions de dollars, repr茅sente un multiple d'EBITDA ajust茅 de 9 fois. On s'attend 脿 ce qu'elle g茅n猫re plus de 50 millions de dollars en synergies de co没ts annuelles sur une p茅riode d'int茅gration de 30 mois. Matthews conservera son activit茅 d'emballage rotograv茅 en Allemagne ainsi que les investissements connexes. Les produits imm茅diats en esp猫ces seront principalement utilis茅s pour r茅duire la dette. La transaction devrait 锚tre finalis茅e d'ici la mi-2025, sous r茅serve des approbations r茅glementaires.
Matthews International (MATW) hat den Verkauf seiner SGK Brand Solutions Abteilung an eine neu gegr眉ndete Gesellschaft, die von Tochtergesellschaften von SGS & Co ins Leben gerufen wurde, bekannt gegeben. Die Struktur des Deals umfasst 350 Millionen Dollar als Vorauszahlung, wobei 250 Millionen Dollar in bar, 50 Millionen Dollar in Vorzugsaktien und 50 Millionen Dollar in behaltenen Forderungen bestehen. Matthews wird auch eine 40%ige Beteiligung am Stammkapital der neuen Gesellschaft erhalten.
Die neue Gesellschaft, die mit etwa 900 Millionen Dollar bewertet wird, repr盲sentiert ein 9-faches angepasstes EBITDA-Multiple. Es wird erwartet, dass 眉ber einen Zeitraum von 30 Monaten j盲hrlich 眉ber 50 Millionen Dollar an Kostensynergien erzielt wird. Matthews wird sein Gesch盲ft mit Rotogravur-Verpackungen in Deutschland sowie verwandte Investitionen beibehalten. Die sofortigen Barerl枚se werden haupts盲chlich zur Schuldensenkung verwendet. Der Abschluss der Transaktion wird f眉r Mitte 2025 erwartet, vorbehaltlich der beh枚rdlichen Genehmigungen.
- Immediate debt reduction through $250 million cash proceeds
- 40% ownership stake in new entity valued at $900 million
- Expected $50 million annual cost synergies in new entity
- 9x EBITDA multiple valuation indicates strong deal pricing
- Retention of valuable German roto-gravure packaging business
- Loss of direct control over SGK Brand Solutions operations
- Reduced revenue stream from full consolidation to equity accounting
- Extended timeline to mid-2025 for transaction completion
- Regulatory approval risks could impact deal closure
Insights
This strategic divestiture represents a sophisticated financial restructuring with multiple value-creation levers. The
The deal's structure at 9x EBITDA multiple aligns with current market valuations for brand solutions businesses. The projected
This transaction marks a pivotal shift in Matthews' portfolio optimization strategy. By divesting SGK Brand Solutions while retaining a significant minority stake, Matthews achieves three strategic objectives:
- Immediate balance sheet improvement through debt reduction
- Operational streamlining by reducing consolidated business complexity
- Potential value creation through synergy realization in the new entity
The retention of the German roto-gravure packaging business suggests a focused approach to maintaining profitable core operations while divesting non-core assets. This move aligns with broader market trends of companies streamlining their portfolios for better market valuation and operational efficiency. The leadership structure of the new entity, combining executives from both SGK and SGS, indicates a well-planned integration strategy to capture the projected synergies.
Matthews to sell SGK to a newly formed entity created by affiliates of SGS & Co
Matthews to realize upfront consideration of
Initial enterprise value of new entity ~
Cash proceeds to be used for immediate debt repayment
New entity projected to realize over
PITTSBURGH, Jan. 08, 2025 (GLOBE NEWSWIRE) -- (NASDAQ GSM: MATW) (鈥淢atthews鈥 or the 鈥淐ompany鈥) and affiliates of SGS & Co (鈥淪GS鈥) have entered into a definitive agreement under which Matthews will sell its interest in SGK Brand Solutions (鈥淪GK鈥) to a newly formed entity created by affiliates of SGS, which will combine SGK and SGS.
Under the terms of the agreement, Matthews will realize
On a go-forward basis, the new entity expects to realize over
Matthews expects the immediate cash proceeds from the transaction of approximately
鈥淥ver the past several years, we have undertaken a deliberate process to maximize the value of our diversified business units, including SGK. This process has involved extensive discussions with multiple prospective partners, resulting in today鈥檚 value-enhancing sale,鈥 said Joseph Bartolacci, Chief Executive Officer of Matthews. 鈥淎s a result of this transaction, we are moving toward a more streamlined business structure that can be better valued by the public equity markets. The structure of the transaction provides Matthews with immediate cash to prioritize debt repayment while providing a path for a full exit of the business at a strong valuation. The Board鈥檚 review of strategic alternatives for our portfolio of businesses remains ongoing and we are committed to creating increased value for our shareholders.鈥
The transaction is expected to be completed in mid-2025, subject to customary closing conditions, including regulatory approvals.
Advisors
J.P. Morgan Securities LLC is serving as financial advisor, K&L Gates is serving as lead transaction counsel and Covington & Burling LLP is serving as antitrust counsel to Matthews on the transaction. Orrick, Herrington & Sutcliffe is serving as legal counsel to SGS on the transaction.
About SGK Brand Solutions
SGK is a brand and content powerhouse focused on brand creation, brand activation, and brand stewardship, providing global solutions to a variety of market verticals, including food and beverage, home and personal care, and lifestyle.
About SGS & Co
SGS & Co is a global brand agency comprising nearly 4,800 associates across 30+ countries that deliver speed and quality brand work through technology and teams for our world-class clients. SGS & Co is comprised of two teams, Marks (Creative) and SGS (Production) to deliver end-to-end in design, graphic services, production, technology, and process optimization. SGS & Co fosters a client-first culture to exceed client expectations and help them win. SGS & Co is deeply committed to diversity, equity, and inclusion and a more sustainable future.
About Matthews International
Matthews International Corporation is a global provider of memorialization products, industrial technologies, and brand solutions. The Memorialization segment is a leading provider of memorialization products, including memorials, caskets, cremation-related products, and cremation and incineration equipment, primarily to cemetery and funeral home customers that help families move from grief to remembrance. The Industrial Technologies segment includes the design, manufacturing, service and sales of high-tech custom energy storage solutions; product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products; and coating and converting lines for the packaging, pharma, foil, d茅cor and tissue industries. The SGK Brand Solutions segment is a leading provider of packaging solutions and brand experiences, helping companies simplify their marketing, amplify their brands and provide value. The Company has over 11,000 employees in more than 30 countries on six continents that are committed to delivering the highest quality products and services.
Additional Information
In connection with the Company鈥檚 2025 Annual Meeting, the Company has filed with the U.S. Securities and Exchange Commission (鈥淪EC鈥) and commenced mailing to the shareholders of record entitled to vote at the 2025 Annual Meeting a definitive proxy statement and other documents, including a WHITE proxy card. SHAREHOLDERS ARE ENCOURAGED TO READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) FILED BY THE COMPANY AND ALL OTHER RELEVANT DOCUMENTS WHEN FILED WITH THE SEC AND WHEN THEY BECOME AVAILABLE BECAUSE THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION. Investors and other interested parties will be able to obtain the documents free of charge at the SEC鈥檚 website, , or from the Company at its website: . You may also obtain copies of the Company鈥檚 definitive proxy statement and other documents, free of charge, by contacting the Company鈥檚 Investor Relations Department at Matthews International Corporation, Two NorthShore Center, Pittsburgh, Pennsylvania 15212-5851, Attention: Investor Relations, telephone (412) 442-8200.
Participants in the Solicitation
The participants in the solicitation of proxies in connection with the 2025 Annual Meeting are the Company, Alvaro Garcia-Tunon, Gregory S. Babe, Joseph C. Bartolacci, Katherine E. Dietze, Terry L. Dunlap, Lillian D. Etzkorn, Morgan K. O鈥橞rien, J. Michael Nauman, Aleta W. Richards, David A. Schawk, Jerry R. Whitaker, Francis S. Wlodarczyk, Steven F. Nicola and Brian D. Walters.
Certain information about the compensation of the Company鈥檚 named executive officers and non-employee directors and the participants鈥 holdings of the Company鈥檚 Common Stock is set forth in the sections entitled 鈥淐ompensation of Directors鈥 (on page 36 and available ), 鈥淪tock Ownership of Certain Beneficial Owners and Management鈥 (on page 64 and available ), 鈥淓xecutive Compensation and Retirement Benefits鈥 (on page 66 and available ), and 鈥淎ppendix A鈥 (on page A-1 and available ), respectively, in the Company鈥檚 definitive proxy statement, dated January 7, 2025, for its 2025 Annual Meeting as filed with the SEC on Schedule 14A, available . Additional information regarding the interests of these participants in the solicitation of proxies in respect of the 2025 Annual Meeting and other relevant materials will be filed with the SEC when they become available. These documents are or will be available free of charge at the SEC鈥檚 website at .
Forward-Looking Statements
Any forward-looking statements contained in this release are included pursuant to the 鈥渟afe harbor鈥 provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions or strategies of the Company regarding the future, including statements regarding the anticipated timing and benefits of the proposed joint venture transaction, and may be identified by the use of words such as 鈥渆xpects,鈥 鈥渂elieves,鈥 鈥渋ntends,鈥 鈥減rojects,鈥 鈥渁nticipates,鈥 鈥渆stimates,鈥 鈥減lans,鈥 鈥渟eeks,鈥 鈥渇orecasts,鈥 鈥減redicts,鈥 鈥渙bjective,鈥 鈥渢argets,鈥 鈥減otential,鈥 鈥渙utlook,鈥 鈥渕ay,鈥 鈥渨ill,鈥 鈥渃ould鈥 or the negative of these terms, other comparable terminology and variations thereof. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company鈥檚 actual results in future periods to be materially different from management鈥檚 expectations, and no assurance can be given that such expectations will prove correct. Factors that could cause the Company鈥檚 results to differ materially from the results discussed in such forward-looking statements principally include our ability to satisfy the conditions precedent to the consummation of the proposed joint venture transaction on the expected timeline or at all, our ability achieve the anticipated benefits of the proposed joint venture transaction, uncertainties regarding future actions that may be taken by Barington in furtherance of its intention to nominate director candidates for election at the Company鈥檚 2025 Annual Meeting, potential operational disruption caused by Barington鈥檚 actions that may make it more difficult to maintain relationships with customers, employees or partners, changes in domestic or international economic conditions, changes in foreign currency exchange rates, changes in interest rates, changes in the cost of materials used in the manufacture of the Company鈥檚 products, any impairment of goodwill or intangible assets, environmental liability and limitations on the Company鈥檚 operations due to environmental laws and regulations, disruptions to certain services, such as telecommunications, network server maintenance, cloud computing or transaction processing services, provided to the Company by third-parties, changes in mortality and cremation rates, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates, or other factors such as supply chain disruptions, labor shortages or labor cost increases, changes in product demand or pricing as a result of domestic or international competitive pressures, ability to achieve cost-reduction objectives, unknown risks in connection with the Company鈥檚 acquisitions and divestitures, cybersecurity concerns and costs arising with management of cybersecurity threats, effectiveness of the Company鈥檚 internal controls, compliance with domestic and foreign laws and regulations, technological factors beyond the Company鈥檚 control, impact of pandemics or similar outbreaks, or other disruptions to our industries, customers, or supply chains, the impact of global conflicts, such as the current war between Russia and Ukraine, the outcome of the Company鈥檚 dispute with Tesla, Inc. (鈥淭esla鈥), the Company鈥檚 plans and expectations with respect to its exploration, and contemplated execution, of various strategies with respect to its portfolio of businesses, the Company鈥檚 plans and expectations with respect to its Board, and other factors described in the Company鈥檚 Annual Report on Form 10-K and other periodic filings with the U.S. Securities and Exchange Commission.
Matthews International Corporation
Corporate Office
Two NorthShore Center
Pittsburgh, PA 15212-5851
Phone: (412) 442-8200
Contacts
Matthews International Corporation
Steven F. Nicola
Chief Financial Officer and Secretary
(412) 442-8262
Dan Moore / Scott Bisang / Clayton Erwin
MATW-CS@collectedstrategies.com
FAQ
What is the total value of Matthews International's (MATW) SGK Brand Solutions sale?
How will MATW use the proceeds from the SGK Brand Solutions sale?
What synergies are expected from the MATW-SGS merger?
When is the MATW-SGS transaction expected to close?
What assets will MATW retain after the SGK Brand Solutions sale?
