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'entità 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 riceverà anche una partecipazione del 40% nell'equity comune della nuova entità.
La nuova entità, 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 manterrà la sua attività 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 completerà a metà del 2025, soggetta alle approvazioni regolatorie.
Matthews International (MATW) ha anunciado la venta de su división SGK Brand Solutions a una entidad recién formada creada por afiliados de SGS & Co. La estructura del acuerdo incluye 350 millones de dólares en consideración inicial, que comprenden 250 millones de dólares en efectivo, 50 millones de dólares en capital preferente y 50 millones de dólares en cuentas por cobrar mantenidas. Matthews también recibirá una participación del 40% en el capital común de la nueva entidad.
La nueva entidad, valorada en aproximadamente 900 millones de dólares, representa un múltiplo de EBITDA ajustado de 9 veces. Se espera que logre más de 50 millones de dólares en sinergias de costos anuales durante un período de integración de 30 meses. Matthews mantendrá su negocio de embalaje rotogravado en Alemania y las inversiones relacionadas. Los ingresos inmediatos en efectivo se utilizarán principalmente para la reducción de deuda. Se espera que la transacción se complete a mediados de 2025, sujeta a las aprobaciones regulatorias.
매튜스 인터내셔널 (MATW)는 SGK 브랜드 솔루션 부문을 SGS & Co 자회사들이 설립한 새 법인에 매각한다고 발표했습니다. 거래 구조에는 3억 5천만 달러의 선급 대가가 포함되며, 2억 5천만 달러의 현금, 5천만 달러의 우선주, 그리고 5천만 달러의 유보된 외상매출금으로 구성됩니다. 매튜스는 새로운 법인의 보통주에서 40%의 지분도 받게 됩니다.
새로운 법인은 약 9억 달러로 평가되며, 조정된 EBITDA의 9배에 해당하는 수치입니다. 30개월의 통합 기간 동안 연간 5천만 달러 이상의 비용 시너지를 달성할 것으로 기대됩니다. 매튜스는 독일의 로토그래비어 포장 사업과 관련 투자들을 유지할 것입니다. 즉각적인 현금 수익은 주로 부채 감축에 사용될 것입니다. 거래는 2025년 중반에 완료될 예정이며, 규제 승인에 따라 달라질 수 있습니다.
Matthews International (MATW) a annoncé la vente de sa division SGK Brand Solutions à une entité récemment formée par les affiliés de SGS & Co. La structure de l'accord comprend 350 millions de dollars en contrepartie initiale, comprenant 250 millions de dollars en numéraire, 50 millions de dollars en actions privilégiées et 50 millions de dollars en créances commerciales conservées. Matthews recevra également une participation de 40% dans l'équité commune de la nouvelle entité.
La nouvelle entité, évaluée à environ 900 millions de dollars, représente un multiple d'EBITDA ajusté de 9 fois. On s'attend à ce qu'elle génère plus de 50 millions de dollars en synergies de coûts annuelles sur une période d'intégration de 30 mois. Matthews conservera son activité d'emballage rotogravé en Allemagne ainsi que les investissements connexes. Les produits immédiats en espèces seront principalement utilisés pour réduire la dette. La transaction devrait être finalisée d'ici la mi-2025, sous réserve des approbations réglementaires.
Matthews International (MATW) hat den Verkauf seiner SGK Brand Solutions Abteilung an eine neu gegründete 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, repräsentiert ein 9-faches angepasstes EBITDA-Multiple. Es wird erwartet, dass über einen Zeitraum von 30 Monaten jährlich über 50 Millionen Dollar an Kostensynergien erzielt wird. Matthews wird sein Geschäft mit Rotogravur-Verpackungen in Deutschland sowie verwandte Investitionen beibehalten. Die sofortigen Barerlöse werden hauptsächlich zur Schuldensenkung verwendet. Der Abschluss der Transaktion wird für Mitte 2025 erwartet, vorbehaltlich der behördlichen 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) -- Matthews International Corporation (NASDAQ GSM: MATW) (“Matthews” or the “Company”) and affiliates of SGS & Co (“SGS”) have entered into a definitive agreement under which Matthews will sell its interest in SGK Brand Solutions (“SGK”) 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
“Over 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’s value-enhancing sale,” said Joseph Bartolacci, Chief Executive Officer of Matthews. “As 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’s review of strategic alternatives for our portfolio of businesses remains ongoing and we are committed to creating increased value for our shareholders.”
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, décor 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’s 2025 Annual Meeting, the Company has filed with the U.S. Securities and Exchange Commission (“SEC”) 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’s website, www.sec.gov, or from the Company at its website: http://www.matw.com/investors/sec-filings. You may also obtain copies of the Company’s definitive proxy statement and other documents, free of charge, by contacting the Company’s 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’Brien, 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’s named executive officers and non-employee directors and the participants’ holdings of the Company’s Common Stock is set forth in the sections entitled “Compensation of Directors” (on page 36 and available here), “Stock Ownership of Certain Beneficial Owners and Management” (on page 64 and available here), “Executive Compensation and Retirement Benefits” (on page 66 and available here), and “Appendix A” (on page A-1 and available here), respectively, in the Company’s definitive proxy statement, dated January 7, 2025, for its 2025 Annual Meeting as filed with the SEC on Schedule 14A, available here. 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’s website at www.sec.gov.
Forward-Looking Statements
Any forward-looking statements contained in this release are included pursuant to the “safe harbor” 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 “expects,” “believes,” “intends,” “projects,” “anticipates,” “estimates,” “plans,” “seeks,” “forecasts,” “predicts,” “objective,” “targets,” “potential,” “outlook,” “may,” “will,” “could” 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’s actual results in future periods to be materially different from management’s expectations, and no assurance can be given that such expectations will prove correct. Factors that could cause the Company’s 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’s 2025 Annual Meeting, potential operational disruption caused by Barington’s 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’s products, any impairment of goodwill or intangible assets, environmental liability and limitations on the Company’s 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’s acquisitions and divestitures, cybersecurity concerns and costs arising with management of cybersecurity threats, effectiveness of the Company’s internal controls, compliance with domestic and foreign laws and regulations, technological factors beyond the Company’s 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’s dispute with Tesla, Inc. (“Tesla”), the Company’s plans and expectations with respect to its exploration, and contemplated execution, of various strategies with respect to its portfolio of businesses, the Company’s plans and expectations with respect to its Board, and other factors described in the Company’s 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
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