#USA #Pittsburgh #Matthews International #Barington Capital #SGK Brand Solutions

Matthews International Corporation: Recent Developments in Strategic Initiatives

On December 7, 2025, Matthews International Corporation (NASDAQ: MATW) provided a comprehensive update regarding its ongoing strategic initiatives aimed at enhancing shareholder value. This communication comes in the wake of a notice from Barington Capital, expressing their intent to nominate directors at the upcoming Annual Meeting of Shareholders. Matthews is actively engaged in measures that not only streamline its business but also fortify its financial standing.

Recent Strategic Actions

Over the past year, Matthews has undergone an extensive strategic review, leading to crucial divestitures that generated substantial proceeds. A pivotal milestone occurred in January 2025 when Matthews sold its SGK Brand Solutions business to Propelis. This transaction closed in May 2025, netting $350 million along with a 40% stake in Propelis. This strategic move allows Matthews' shareholders to tap into potential cost synergies and future growth in this segment. Notably, Propelis is projected to surpass $100 million in adjusted EBITDA, reflecting the robust performance of the combined entities.

Following this, in November 2025, Matthews divested its Warehouse Automations business to Duravant for $230 million, providing a valuable cash infusion while maintaining a compelling valuation multiple. This transaction is pending regulatory approval and is expected to finalize before the second quarter of fiscal 2026.

These divestitures align with Matthews' goal of achieving a long-term net leverage ratio of 2.5x, underscoring a firm commitment to reducing debt while fostering growth in its core Memorialization and Product Identification businesses. The ongoing strategic review signifies Matthews' dedication to leveraging competitive strengths in high-growth sectors, particularly in energy storage solutions and the innovative Axian product line.

Robust Business Performance

Matthews' core operations continue to display resilience, as evidenced by a recent quarterly earnings release indicating year-over-year improvements in adjusted EBITDA and revenue, particularly within the Memorialization segment. Despite challenges faced by the Industrial Technologies segment due to ongoing litigation with Tesla, Matthews has successfully navigated several rulings in its favor, substantiating the value of its proprietary technology.

Additionally, the company implemented efficiency measures that resulted in an $8.5 million reduction in corporate costs year-over-year and improved adjusted EBITDA margins. Furthermore, Matthews is maintaining a disciplined capital allocation approach, focusing on debt reduction while returning capital to shareholders through dividends and share repurchases. The Board recently announced a quarterly dividend increase to $0.255, marking the 32nd consecutive annual increase since its public listing.

Engagement with Barington Capital

Matthews has actively sought constructive dialogue with Barington Capital, providing quarterly access to its executive management team, as stipulated in a settlement agreement from December 2022. Over 25 substantive discussions were conducted, although Barington failed to present actionable recommendations. Following Barington's prior attempts at a proxy contest that resulted in Matthews' nominees being elected, the company is bracing for another contested election, despite the Board's commitment to its strategic priorities.

Looking Ahead

As the company advances towards its 2026 Annual Meeting of Shareholders, it plans to introduce proposals for board declassification, the adoption of majority voting, and the removal of supermajority voting requirements for mergers, reflecting shareholder feedback.

The upcoming meeting date is yet to be scheduled, and shareholders are advised that no immediate action is required on their part. Formal recommendations regarding director nominations will be presented in the upcoming proxy materials filed with the SEC.

Conclusion

Matthews International is navigating a dynamic phase, characterized by strategic divestitures and focused operational efficiency. With a commitment to enhancing shareholder value and fostering growth in its core sectors, Matthews is poised for continued success despite external challenges. As the situation with Barington Capital unfolds, the company remains steadfast in its strategic objectives and dedicated to engaging with its shareholders transparently.