Mayville Engineering Company, Inc. (MEC), a leading value-added provider of design, prototyping and manufacturing solutions serving diverse end-markets, signed a definitive agreement to acquire Mid-States Aluminum Corp., a an industry-leading extruder based in Wisconsin, for a total consideration of approximately $96 million (subject to customary adjustments). The acquisition will provide MEC with additional fabrication capabilities, which will position the company as a leading domestic manufacturing partner for large OEMs. It will also enable Mid-States Aluminum to expand its capabilities.
“[Mid-States] is an established provider of aluminum extrusions, whose history of growth and innovation, attractive margin profile, deep customer relationships and diverse end-markets are highly complementary to our existing business,” said Jag Reddy, president and Chief Executive Officer. “Our acquisition of [Mid-States] will accelerate the expansion of MEC’s capabilities into lightweight materials fabrication… [Mid-State’s] state-of-the-art design, engineering and manufacturing capabilities are highly complementary to our existing operations, providing a platform for higher-margin profitable growth within growing adjacent markets.”
Founded in 1964, Mid-States Aluminum is a vertically integrated manufacturer of custom aluminum extrusions and fabrications with two state-of-the-art facilities located in Fond du Lac, Wisconsin, which include approximately 325,000 square-feet of manufacturing space. The company offers value-added services, including design, engineering, extrusions, fabrication, anodizing and finishing, assembly, and packaging. It serves major OEMs in the building and construction, recreational, medical, agriculture, transportation, and other diverse end-markets. For the full-year 2022, Mid-States Aluminum recorded total revenue and adjusted EBITDA of approximately $86 million and $16 million, respectively, resulting in an adjusted EBITDA margin of more than 18%.
The acquisition is expected to have a number of benefits for MEC, including:
- Mid-States will provide MEC light-weight materials fabrication capabilities. These capabilities will further positions MEC to capture demand being created by multi-year onshoring and energy transition trends.
- Mid-States will provide new cross-selling opportunities with existing customers. Many of MEC’s longstanding customers in the commercial vehicle, power sports, agriculture and construction, and access markets have indicated an immediate need for aluminum fabrication capabilities. Through Mid-States, MEC will be able to actively meet this existing customer demand, creating attractive revenue synergies.
- Mid-States will expand MEC’s service capabilities within growing adjacent markets, particularly in regards to emerging technologies. This includes battery electric vehicles, where demand for light-weight material product design, engineering, and fabrication solutions continue to accelerate.
- Mid-States will provide a complementary domestic manufacturing footprint. The location of Mid-State’s facilities will allow for an easier integration into MEC’s existing network and process flow. MEC anticipates no material disruption to the operations of either company during the integration period, which is expected to conclude by the end of 2023.
“Customer demand for fabrications expertise within aluminum and other lightweight materials continues to increase,” stated Reddy. “The addition of [Mid-States] will position us to grow our share-of-wallet with existing accounts, while building leading market positions within nascent, high-potential industries that require the full lifecycle of solutions that we offer. During the next three years, we anticipate significant synergies to result from this transaction, consistent with our long-term focus on margin expansion and profitable growth.”
Founded in 1945, MEC is a leading U.S.-based, vertically-integrated, value-added manufacturing partner providing a full suite of manufacturing solutions from concept to production, including design, prototyping and tooling, fabrication, coating, assembly and aftermarket components. The company’s customers operate in diverse end markets, including heavy- and medium-duty commercial vehicles, construction and access equipment, powersports, agriculture, military and other end markets. The company maintains an extensive manufacturing infrastructure with 20 facilities across seven states.