Mayville Engineering to acquire Accu-Fab for $140.5 million

MILWAUKEE - Mayville Engineering Company (NYSE: MEC), a prominent provider of manufacturing solutions with a current market capitalization of $310 million, has entered into a definitive agreement to purchase Accu-Fab, LLC from Tide Rock Holdings. According to InvestingPro analysis, MEC is currently trading below its Fair Value, suggesting potential upside for investors. The transaction, valued at $140.5 million plus adjustments, is set to close in the third quarter of 2025, pending standard closing conditions.

Accu-Fab, a contract manufacturer known for its advanced metal fabrication, serves OEMs in critical power infrastructure, data centers, and renewable energy sectors. With facilities in Raleigh, North Carolina, and Wheeling, Illinois, Accu-Fab’s integration is expected to be immediately accretive to MEC’s Adjusted EBITDA (currently at $52.42 million), margins, and Adjusted Earnings Per Share. MEC’s financial health is rated as GOOD by InvestingPro, with a strong current ratio of 1.67 indicating solid short-term liquidity.

Jag Reddy, MEC’s CEO, highlighted the strategic fit, noting the acquisition’s alignment with MEC’s growth platform and its potential to create long-term value. Reddy emphasized the deal’s role in MEC’s expansion into high-growth markets and its contribution to revenue and cost synergies.

Accu-Fab’s financial performance in 2024 reported net sales of around $61 million and an Adjusted EBITDA of $14 million, indicating a robust margin profile. MEC plans to finance the acquisition through cash and borrowings under its existing credit facility, supported by Wells Fargo Bank and JPMorgan Chase Bank with an additional $50 million in commitments.

Upon completion, MEC’s net debt to Adjusted EBITDA ratio is expected to be around 3.0x, with intentions to reduce leverage within the first eighteen months post-closing. The acquisition is anticipated to add $28 to $32 million in net sales and $6 to $8 million in Adjusted EBITDA for MEC in 2025. InvestingPro data reveals that MEC currently trades at a P/E ratio of 13.8x, with management actively buying back shares, suggesting confidence in the company’s future prospects.

The acquisition is seen as a strategic move to diversify MEC’s operations and enhance its commercial reach, with Accu-Fab’s strong customer relationships and value-added services. The combined entity aims to realize potential annual revenue synergies of $3 to $5 million over the next two years and approximately $1.0 million in annual cost synergies by 2026 through operational improvements.

MEC is hosting a conference call and webcast today at 9:00 a.m. Eastern Time to discuss the acquisition details. Interested parties can access the webcast on MEC’s investor relations website or join the call using the provided access codes.

This news is based on a press release statement from Mayville Engineering Company.

In other recent news, Mayville Engineering Company (MEC) reported its Q1 2025 earnings, revealing an earnings per share (EPS) of $0.04, which fell short of the forecasted $0.07. However, the company’s revenue surpassed expectations slightly, reaching $135 million compared to the anticipated $134.52 million. Despite the earnings miss, MEC’s stock experienced a positive market reaction, rising by 3.08%. The company remains confident in its future performance, maintaining its full-year guidance with expected net sales between $560 million and $590 million and adjusted EBITDA projected at $60 million to $66 million. Additionally, MEC has secured $35-40 million in new business by April, aiming for $100 million by the end of the year, focusing on areas like data centers and electrical infrastructure. Challenges persist, with a 15.9% year-over-year decline in total sales, but the company is pursuing new markets and opportunities. Analysts from firms like William Blair have inquired about MEC’s strategies regarding potential regulatory changes and reshoring opportunities, reflecting continued interest in the company’s strategic direction.

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