...NEW YORK (S&P Global Ratings) June 24, 2024--Pittsburgh-based Matthews International Corp. (MATW)'s customer Tesla Inc. filed a lawsuit on June 14, 2024, alleging that MATW misappropriated Tesla's trade secrets, breached a contract, and engaged in unfair competition with purported damages exceeding $1 billion. The lawsuit references Tesla's engagement with MATW's energy storage business. It is part of the industrial technologies segment (27% of overall revenue and 23% of EBITDA in 2023) and provides manufacturing equipment to make dry cell electrodes, which can be used in next-generation batteries for electric cars, among other applications. We view the lawsuit as an incremental risk to the rating, but also highly uncertain in the ultimate impact on MATW's operating results and debt leverage. The complaint does not include enough information to evaluate the claims, and we do not include a litigation liability in our base case. As a result of the lawsuit, we see some risk to our 2024 and...
