- 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.
AKRON, Ohio –Myers Industries, Inc., a leading manufacturer and distributor of industrial products, today announced that it has completed its acquisition of Signature Systems, 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. 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.
“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,” commented Chief Financial Officer Grant Fitz.
“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.