MATTHEWS INTERNATIONAL CORPORATION (NASDAQ:MATW) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
On December1, 2017, Matthews International Corporation (“Matthews”) and certain direct and indirect domestic subsidiaries of Matthews (the “Guarantors”) entered into a purchase agreement (the “Purchase Agreement”) with J.P. Morgan Securities LLC, as representatives of the several initial purchasers (the “Initial Purchasers”), to issue and sell $300,000,000 aggregate principal amount of 5.250% Senior Notes due 2025 (the “Notes”) in the United States to qualified institutional buyers to Section4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States to non-U.S. persons to Regulation S under the Securities Act. Matthews expects that the Initial Purchasers and subsequent holders of the Notes will transfer the Notes to exemptions from the registration requirements of the Securities Act to either Rule 144A or Regulation S under the Securities Act. Subject to the obligations of Matthews and the Guarantors under the Second Amended and Restated Loan Agreement by and among Matthews, the Guarantors and certain lenders (as amended from time to time, the “Senior Credit Facility”), the Notes will be senior unsecured debt obligations of the Company and will initially be guaranteed on a senior unsecured basis by the Guarantors. Matthews intends to use the net proceeds from this offering to repay indebtedness outstanding under the Senior Credit Facility. Matthews estimates that the net proceeds from this offering will be approximately $297million, after deducting estimated offering fees to the Initial Purchasers.
On December6, 2017, Matthews issued the Notes to the Initial Purchasers to the Purchase Agreement. The Notes are governed by an indenture (the “Indenture”), dated as of December6, 2017, by and among Matthews, the Guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Notes mature on December1, 2025, and interest on the Notes accrues at a rate of 5.250% per annum, payable in cash semi-annually on June1 and December1 of each year, commencing on December6, 2018.
Matthews may redeem the Notes, in whole or in part, at any time on or after December1, 2020 at the redemption prices (expressed as a percentage of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest on the Notes, if any, to, but not including, the applicable date of redemption, if redeemed during the twelve-month period beginning on December1 of each of the year indicated below:
2023 and thereafter
Additionally, Matthews may redeem the Notes, in whole or in part, prior to their maturity date. At any time prior to December1, 2020, Matthews may redeem up to 35% of the original principal amounts of the Notes with the proceeds of certain equity offerings at a redemption price equal to 105.250% of the aggregate principal amount of the redeemed Notes, plus accrued and unpaid interest, if any, to the date of the redemption. Such redemption must occur within 90 days after the closing of any such equity offering. In addition, at any time prior to December1, 2020, Matthews may redeem the Notes, in whole or in part, at a price equal to 50% of the aggregate principal amount of the Notes, plus a “make-whole” premium and accrued and unpaid interest, if any, to, but not including, the date of redemption.
The Notes initially will be irrevocably and unconditionally guaranteed on a senior unsecured basis by the Guarantors. Each of the note guarantees will be effectively subordinated to all secured debt of a Guarantor, including the guarantees under the Senior Credit Facility. The Notes will not be guaranteed by any other of Matthew’s subsidiaries, except to the extent Matthews causes any such subsidiary to guarantee the Notes to comply with the covenants applicable to the Notes.
If Matthews experiences the occurrence of specific kinds of changes of control, holders of the Notes have a right to cause Matthews to repurchase some or all of the holder’s Notes at 101% of their face amount, plus accrued and unpaid interest, if any, to, but not including the purchase date.
The Indenture will, among other things, limit Matthew’s ability and Matthew’s subsidiaries, unless subsequently designated as an unrestricted subsidiary, to:
|•||incur additional indebtedness and guarantee indebtedness;|
|•||pay dividends or make other distributions or repurchase or redeem Matthew’s capital stock;|
|•||issue certain preferred stock or similar equity securities;|
|•||make loans and investments;|
|•||sell or otherwise dispose of assets;|
|•||enter into transactions with affiliates;|
|•||alter the business that Matthews or any of its Restricted Subsidiaries conducts;|
|•||enter into agreements restricting Matthew’s subsidiaries’ ability to pay dividends; and|
|•||consolidate, merge or sell all or substantially all of Matthew’s assets.|
These covenants are subject to a number of important exceptions and qualifications. In addition, during any period of time that the notes have investment grade ratings from both Moody’s Investors Services, Inc. and Standard& Poor’s, many of the covenants will be suspended.
The Indenture also provides for certain customary events of default, including but not limited to, (i)nonpayment of principal of or interest on the Note when it becomes due and payable, (ii)failure to give timely notice of specified change of control triggering events, (iii)failure to comply with any other agreement under the Indenture, (iv)a default under other indebtedness of Matthews or its subsidiaries having a principal amount outstanding in excess of $50.0million, which results in acceleration of the maturity of such debt and (v)bankruptcy, insolvency or reorganization involving Matthews or a significant subsidiary. Such events of default would permit the principal and any accrued and unpaid interest on all of the then outstanding Notes to be declared by the Trustee or holders of at least 25% in aggregate principal amount of the then outstanding Notes to be immediately due and payable, except that in the event of bankruptcy, insolvency or reorganization-related events of default involving Matthews, the principal and any accrued and unpaid interest on all of the then outstanding Notes would automatically become due and payable.
The description of the Notes and the Indenture contained in this Current Report on Form 8-K is qualified in its entirety by reference to the complete text of the Indenture and the Form of 5.250% SeniorNote due December1, 2025 included in the Indenture, copies of which are filed as Exhibit4.1 and Exhibit4.2, respectively, and incorporatedherein by reference.
|Item 1.01.||Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.|
The information set forth in Item 1.01 above is incorporated into this Item 1.01 by reference.
|Item 1.01.||Financial Statements and Exhibits.|
|4.1||Indenture, dated as of December6, 2017, by and among Matthews, the Guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee.|
|4.2||Form of 5.250% Senior Note due December1, 2025 (included in Exhibit 4.1).|
|10.1||Purchase Agreement, dated as of December 1, 2017 by and among Matthews International Corporation, the Guarantors, and J.P. Morgan Securities LLC as representative of the several initial purchasers named therein.|
MATTHEWS INTERNATIONAL CORP ExhibitEX-4.1 2 d506027dex41.htm EX-4.1 EX-4.1 Exhibit 4.1 EXECUTION VERSION INDENTURE Dated as of December 6,…To view the full exhibit click
About MATTHEWS INTERNATIONAL CORPORATION (NASDAQ:MATW)
Matthews International Corporation is a provider of brand solutions, memorialization products and industrial technologies. The Company operates through three segments: SGK Brand Solutions, Memorialization and Industrial Technologies. The SGK Brand Solutions segment provides brand development, deployment and delivery (consisting of brand management, printing plates and cylinders, pre-media services and imaging services for consumer packaged goods and retail customers, merchandising display systems, and marketing and design services). The Memorialization segment manufactures and markets a line of memorialization products used primarily in cemeteries, funeral homes and crematories. The Industrial Technologies segment designs, manufactures and distributes a range of marking, coding and industrial automation solutions, order fulfillment systems and related consumables.