Matthews International is embarking on a significant strategic overhaul, a move announced alongside renewed pressure from activist investors. The company’s response involves divesting business units valued at approximately $580 million and committing to a series of corporate governance reforms.
Activist Investor Re-engages
Despite the company’s announced strategic shifts, activist hedge fund Barington Capital has once again escalated its campaign. Coming less than a year after a prior proxy contest, Barington has nominated a fresh slate of director candidates for election.
In a preemptive move for its 2026 annual meeting, Matthews has proposed its own governance changes:
* Eliminating its staggered board structure to allow for the annual election of all directors.
* Adopting a majority voting standard for director elections.
The company also highlighted the addition of four new independent directors since 2023 and the appointment of Michael Nauman as the designated non-executive chair.
Strategic Divestitures to Streamline Portfolio
The core of the transformation stems from a strategic review initiated in November 2024, resulting in two major divestitures:
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- The sale of its SGK Brand Solutions division for $350 million. This transaction is expected to close in May 2025.
- The divestment of its Warehouse Automation business for $230 million, with completion targeted for the second quarter of fiscal 2026 (November 2025).
Management stated that proceeds will be directed primarily toward debt reduction, with a goal of achieving a net leverage ratio of 2.5x to strengthen the balance sheet.
Financial Performance and Capital Allocation
Separately, Matthews International reported its fourth fiscal quarter results, noting higher EBITDA and adjusted earnings per share figures when excluding the contribution from the soon-to-be-sold SGK unit.
The board approved an increase in the quarterly dividend to $0.255 per share, marking the company’s 32nd consecutive annual increase. During the reporting period, Matthews also repurchased over $12 million worth of its own shares and reduced its debt by $65.6 million.
The announcements paint a picture of a corporation under substantial pressure to execute. Its immediate future will be shaped by the timely completion of the asset sales and the ongoing confrontation with Barington Capital. The next key milestones are securing regulatory approvals for the transactions and the 2026 shareholder meeting.
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