Mayville Engineering Acquires Privately-Held Mid-States Aluminum For $96M

Mayville Engineering Company Inc MEC has entered into a definitive agreement to acquire privately held Mid-States Aluminum Corp (MSA) for a total consideration of about $96 million.

Wisconsin-based MSA is a vertically integrated manufacturer of custom aluminum extrusions and fabrications. It offers value-added services that include design, engineering, extrusions, fabrication, anodizing and finishing, assembly, and packaging. 

The proposed acquisition is expected to close during the third quarter of 2023.

"Our acquisition of MSA will accelerate the expansion of MEC's capabilities into lightweight materials fabrication, a designated strategic priority highlighted within our MBX value creation framework," said Jag Reddy, President and Chief Executive Officer.

The company intends to fund the transaction with an amendment to its existing credit agreement, increasing the revolving credit facility size to $250 million. 

Mayville expects the acquisition will contribute between $30 million - $35 million of net sales and between $4 million - $6 million in Adjusted EBITDA for the fiscal year 2023.

The company expects the acquisition to be immediately accretive, excluding transaction costs, to its EPS, Adjusted EBITDA, and Free Cash Flow at closing.

The company held $126,000 in cash and equivalents as of March 31, 2023.

Price Action: MEC shares closed lower by 1.68% at $14.03 on Friday.