Pittsburgh-based Matthews International Corp. recently sold its SGK Brand Solutions business (SGK) to SGS & Co (SGS), a newly formed entity created by affiliates, for $350 million.
SGK and SGS combine into a new company that is projected to realize more than $50 million in annual cost synergies and growth opportunities over the next 30 months. Gary Kohl, SGK group president, will serve as CEO.
“We are pleased to have successfully closed this transaction,” Joseph C. Bartolacci, Matthews International president and CEO, said. “The sale of SGK accelerates our strategic focus on our core businesses while substantially improving our financial flexibility. We believe the new entity, under Gary’s proven leadership, is well-positioned for strong performance, and Matthews will continue to benefit from its future growth through our minority interest.”
Under the terms of the transaction, $250 million was paid in cash when the deal closed along with 40 percent common equity interest in the new company, $50 million of preferred equity in the new company and the retention of approximately $50 million in trade receivables.
The company will use proceeds from the sale to reduce debt.
Matthews International employs 5,400 people in 19 countries and operates through two core global businesses.