Pittsburgh-based Matthews International Corp. (MATW) entered into a definitive agreement to contribute its SGK business to a joint venture with competitor SGS&Co. for $250 million cash, $50 million in trade receivables, $50 million of preferred equity, and a 40% common equity interest in the venture. We expect MATW to use the net cash proceeds to repay debt but estimate S&P Global Ratings-adjusted debt to EBITDA will be essentially unchanged at the high-end of the 4x-5x range for 2025 because of the decrease of approximately $60 million in EBITDA related to the divestiture. Following the sale of SGK, we view the remaining memorialization and industrial businesses as materially less diversified and more volatile, especially given underperformance and uncertainty in
