Matthews announces investment sale

Foundation Partners why I partnered

On Tuesday global death care company Matthews International announced a sale, that was effective on June 26, of a non-controlling ownership interest in a pet cremation services business.  According to this release from Matthews, the company sold its interest for a total of $57.2 million.

That $57.2 million was to be paid to Matthews International with $42.2 million in cash and another $15.0 million in preferred stock of the company, which was not named.  Again, according to the release, Matthews intends to use the $42.0 million to trim the company’s debt obligations.

Matthews International bills themselves as a global solutions company and they are represented in the death care realm by their Memorialization segment which produces Aurora Caskets among other products.  The company, in the death care space, also operates in the cemetery memorial business and the cremation and incineration business.  The entire company employs 11,000 people on six continents.

Funeral Director Daily take:  We certainly don’t know the numbers or the prospects of the pet cremation services stock that Matthews liquidated in this transaction.  However, it is no secret that the Matthews organization has had some sales challenges over the course of the last year, and even in 2020.  The companies stock has dropped from a high of $40.36 per share on January 17, 2020 to $19.17 as this article is being written on Tuesday, June 30.  That is a drop of over 50%.

Instead of holding on to a stock in a company that may or may not turn out, it is our opinion that Matthews made a prudent decision in this COVID world where the consensus of most companies is to trim debt service and be nimble.  Knocking over $42 million off their corporate debt can allow that debt service cash to be reallocated to where the company believes it will be better spent.

Even though the company’s stock price is roughly 50% lower than it was at that high peak in January, some believe that the company is making the right moves to get moving again.  According to E-Trade Consensus View, Matthews International stock is rated as a “Moderate” Buy opportunity for investors as of today – June 30.

News from the world of Death Care:

Receive Funeral Director Daily posts by email
Never miss a Funeral Director Daily article. Submit this form and we'll send you every post by email.
Print Friendly, PDF & Email

Leave a Comment

Your email address will not be published.