Myers Industries Completes Acquisition of Signature Systems
February 08 2024 - 3:05PM
Business Wire
Transaction strengthens Myers’ portfolio of
market leading brands and enhances margin and EPS growth
profiles
Signature Systems’ leading position in the
high-growth infrastructure and ground protection markets provides
an attractive platform for growth and is expected to deliver both
double-digit EPS accretion and $8 million of run-rate synergies by
2025
Myers Industries, Inc. (NYSE: MYE) (“Myers” or the “Company”), a
leading manufacturer and distributor of industrial products, today
announced that it has completed its acquisition of Signature
Systems (“Signature”), which was previously announced on January 2,
2024.
“We are excited to welcome the Signature team to Myers with the
closing of this transaction,” said Mike McGaugh, Chief Executive
Officer of Myers Industries. “This acquisition strengthens our
growing portfolio of market leading brands, enhances our
profitability profile and demonstrates Myers’ capability as a
platform for acquisitive growth. With a strong runway of future
growth, due to increasing infrastructure investments over the next
decade, we believe Signature’s sustainable competitive advantage,
strong earnings growth, and free cashflow profile will help us
accelerate EPS growth and achieve our long-term strategic
objectives.”
The cash transaction of $350 million was funded through an
amendment and restatement of Myers’ existing loan agreement, which
maintained a $250 million revolving credit facility and added a new
$400 million 5-year senior secured term loan A (collectively, the
“Loan Agreement”). The term loan A was increased by $50 million
from the amount initially contemplated. These combined senior
secured loan agreements enhance Myers’ overall liquidity profile
and capacity for future potential acquisitions. Pro forma for the
acquisition, the Company’s net leverage ratio is approximately
3.0x, which is within management’s target range. The financial
results of Signature Systems are expected to be included within
Myers’ Material Handling segment.
Chief Financial Officer Grant Fitz commented, “As mentioned in
January, this transaction is expected to be neutral to slightly
dilutive to US GAAP EPS in fiscal year 2024, and we anticipate
Signature will deliver EPS accretion of $0.20 to $0.30 in 2025 and
$0.40 to $0.50 in 2026 with additional meaningful EPS accretion
beyond 2026. We also expect annualized run-rate operational and
cost synergies of $8 million to be fully captured by 2025 with
additional synergies to be realized once Signature has an
opportunity to leverage the Myers Business System. Excluding other
potential opportunities that may come forward, we anticipate using
the free cash flow generated from the combined Myers and Signature
company to allow Myers to reduce the net leverage ratio below 2.0x
within two years of closing of this transaction.”
Moelis & Company LLC served as the exclusive financial
advisor to Myers with respect to the transaction, while Vorys,
Sater, Seymour and Pease LLP and Davis Polk & Wardwell LLP
provided legal counsel. William Blair & Company LLC served as
exclusive financial advisor and Honigman LLP served as legal
counsel to Signature. The Loan Agreement was led by J.P. Morgan
Chase, U.S. Bank National, Wells Fargo Bank and KeyBank
National.
About Myers Industries Myers
Industries, Inc. is a leading manufacturer of a wide range of
polymer products for industrial, agricultural, automotive,
commercial and consumer markets. The Company is also the largest
distributor of tools, equipment and supplies for the tire, wheel,
and under-vehicle service industry in the U.S. Visit
www.myersindustries.com to learn more.
About Signature Systems
Signature Systems manufactures and distributes composite matting
ground protection for industrial applications, stadium turf
protection and temporary event flooring. Signature protects its
customers around the world by designing, engineering and
manufacturing premier composite matting systems that keep people,
property and equipment safe. Signature offers application-based
solutions and customer-informed engineering for multiple
industries, ranging from industrial sectors to the world's
highest-profile major venues and events. Its leading global brands
include MegaDeck®, SignaRoad®, DuraDeck®, OmniDeck®, ArmorDeck® and
EventDeck®. Visit www.signature-systems.com to learn more.
Caution on Forward-Looking Statements Statements in this
release include “forward-looking statements” within the meaning of
the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995, including information regarding the
Company’s financial outlook, future plans, objectives, business
prospects and anticipated financial performance. Forward-looking
statements can be identified by words such as “will,” “believe,”
“anticipate,” “expect,” “intend,” “plan,” or variations of these
words, or similar expressions. These forward-looking statements are
neither historical facts nor assurances of future performance.
Instead, they are based only on the Company’s current beliefs,
expectations and assumptions regarding the future of our business,
future plans and strategies, projections, anticipated events and
trends, the economy and other future conditions. Because
forward-looking statements relate to the future, these statements
inherently involve a wide range of inherent uncertainties, risks
and changes in circumstances that are difficult to predict and many
of which are outside of our control. The Company’s actual actions,
results, and financial condition may differ materially from what is
expressed or implied by the forward-looking statements.
Specific factors that could cause such a difference on our
business, financial position, results of operations and/or
liquidity include, without limitation, raw material availability,
increases in raw material costs, or other production costs; risks
associated with our strategic growth initiatives or the failure to
achieve the anticipated benefits of such initiatives; unanticipated
downturn in business relationships with customers or their
purchases; competitive pressures on sales and pricing; changes in
the markets for the Company’s business segments; changes in trends
and demands in the markets in which the Company competes;
operational problems at our manufacturing facilities or unexpected
failures at those facilities; future economic and financial
conditions in the United States and around the world; inability of
the Company to meet future capital requirements; claims, litigation
and regulatory actions against the Company; changes in laws and
regulations affecting the Company; impacts from the novel
coronavirus (“COVID-19”) pandemic; and other risks and
uncertainties detailed from time to time in the Company’s filings
with the SEC, including without limitation, the risk factors
disclosed in Item 1A, “Risk Factors,” in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2022. Given
these factors, as well as other variables that may affect our
operating results, readers should not rely on forward-looking
statements, assume that past financial performance will be a
reliable indicator of future performance, nor use historical trends
to anticipate results or trends in future periods. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date thereof. The Company
expressly disclaims any obligation or intention to provide updates
to the forward-looking statements and the estimates and assumptions
associated with them.
M-INV
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version on businesswire.com: https://www.businesswire.com/news/home/20240208538961/en/
Meghan Beringer Senior Director of Investor Relations (252)
536-5651
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