Matthews International To Buy Schawk In $577 Mln Cash, Stock Deal

(RTTNews) - Funeral related products maker Matthews International Corp. (MATW) agreed Monday to acquire global brand development company Schawk, Inc. (SGK)), marketed as SGK, in a cash and stock deal valued at about $577 million to create a global leader in brand solutions.

The deal, which has the approval of the board of directors of both companies and a special committee of independent directors of SGK, is expected to close during the third quarter of 2014.

"With their North American presence and Asian competencies, combined with our European strength and merchandising capabilities, this alliance will create compelling new opportunities for our clients and employees in all of the markets we serve," Matthews President and CEO Joseph Bartolacci said in a statement.

The deal will see SGK shareholders receive $11.80 cash and 0.20582 shares of Matthews' common stock for each SGK share the hold. The deal represents an implied price of $20.00 for each SGK share, based on the Matthews' closing share price of $39.84 on Friday.

The offer price also represents a 35.8 percent premium over to SGK's closing share price of $14.73 on Friday.

The closure of the deal is primarily subject to receipt of regulatory approvals and approval by SGK's stockholders. Certain members of the Schawk family and various Schawk family trusts, who collectively own about 61 percent of the common stock of SGK, have already agreed to vote in favor of the deal.

Meanwhile, current SGK CEO David Schawk has agreed to lead the combined SGK and Matthews' brand solutions business. David Schawk will also join Matthews' board of directors following the completion of the deal.

"SGK has done a tremendous job of establishing their brands, including Schawk!, Anthem and Brandimage. The combination of these brands with our well-established Matthews' brands will all be branded under the SGK name," Bartolacci added.

The combined company is anticipated to generate annual revenues of about $850 million for the combined business under the SGK banner. The combination is also expected to achieve $35 million to $45 million in annual cost-savings and is anticipated to be accretive to adjusted earnings per share in the first full fiscal year after the deal closes, excluding deal related expenses and costs.

"With Matthews International's trusted reputation in Europe and ours in North America, Europe and Asia Pacific, this alliance is expected to form a stronger global offering and provide greater value to our clients and the markets we serve, along with enhancing our ability to expand into key brand-development markets," SGK CEO David Schawk stated.

Pittsburgh, Pennsylvania-based Matthews International makes products such as memorials and caskets, while Des Plaines, Illinois-based SGK is a leading global brand development, activation and brand deployment company. SGK reported sales of $443 million for 2013 and has about 3,600 employees in over 20 countries.

In Monday's regular trading session, MATW is currently trading at $41.10, up $1.26 or 3.16% on a volume of 48,900 shares, and SGK is trading at $20.12, up $5.39 or 36.59% on a volume of 0.12 million shares.