Matthews buys York division for $45 million

Matthews International Corp., which makes bronze grave markers and cremation urns, bought a division of its main competitor, the Houston-based York Group Inc., for $45 million, the companies announced on Thursday.

By the end of this year, Pittsburgh-based Matthews, the city's oldest company, also plans to purchase all outstanding York shares, which are valued at about $90 million.

Already the leader in the death-care industry, Matthews' acquisition of its strongest rival caps the company's decade-long spate of acquisitions. Industry analysts estimate that the York acquisition will give Matthews about 75 percent of the market for bronze burial memorials.

York, which recently restructured its debt, has to meet certain financial targets as a condition for the sale. Last year, York posted an $11.7 million loss on sales of $192.5 million.

Matthews shares rose 6 cents to $35.37 yesterday. York's shares rose 7 cents to $7.92.

Matthews' acquisition of York's outstanding shares makes the local company the second largest producer of caskets in the country. The largest is the Batesville Casket Co. of Batesville, Ind.

Earlier this year, York rejected a purchase offer from Wilbert Funeral Services, which already owned 14 percent of York shares.

Besides its purchase of York's bronze division, Matthews is bidding for all of York's outstanding shares at $10 per share.

'The combination of York and Matthews will present many opportunities,' said Matthews chief executive David Kelly in a conference call yesterday.

Thomas Crawford, York's president and chief executive, who is expected to lead Matthews casket operations after the acquisition, said the York's board of directors unanimously supports the acquisition.

One year ago, York was saddled with $80 million in debt. In less than a year, the company has reduced the debt to $30 million.

As part of the transaction, Matthews will buy York's factories in Bryan, Tex., and Kingwood, W.Va.

Matthew's officials believe the company' consolidation of the bronze memorial business does not raise antitrust questions.

'We do not believe that will be a problem,' said Matthews Vice President Ed Boyle.

About two thirds of cemetery monuments sold in the United States are made from granite, and Matthews has only minimal granite interests. Moreover, Matthews will have significant competition from other manufacturers of mausoleums and cremation equipment, Boyle said.

The bronze memorials made at Matthews are found everywhere from Halls of Fame and corporate board rooms to the Sultan of Brunei's 747 hangar. The company's elaborately crafted plaques cover Elvis Presley's grave and memorialize baseball great Ty Cobb at the Baseball Hall of Fame.

Matthews has grown with many recent acquisitions; it also has grown by keeping a close eye on trends in the death-care business

The company's spate of acquisitions began in 1989, when Matthews bought The Arrow Bronze Co. in Australia. Since then, Matthews has bought All Crematory Inc., a supplier of cremation equipment; The SLN Group, an etching business; the Gibraltar Mausoleum Construction Co.; and Granite Resources Corp., the

country's largest importer of granite monuments and vases.

Two years ago, Matthews paid $25 million for Caggiati SpA, based in Parma, Italy, and Europe's leading manufacturer of bronze memorials

The company's other recent acquisitions include: Industrial Equipment and Engineering Co., also a cremation equipment company, and Technogranit, a Canadian cremation services company.

Matthews was founded by John Robert Matthews, an immigrant engraver from Sheffield, England, who began by selling stencils, steel stamps and branding irons in the Pittsburgh of 1850. The company started making bronze plaques in the 1920s.