Mayville Engineering Company (MEC) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition diversifies into high-growth, less cyclical end markets such as power infrastructure, data centers, and renewable energy, reducing reliance on legacy markets.

• Entry into infrastructure-oriented products leverages long-term macroeconomic catalysts and supports MBX value creation framework.

• Accu-Fab brings advanced capabilities in light-gauge sheet metal fabrication, design, prototyping, and precision manufacturing for electronics and data centers.

• Enhances geographic footprint with facilities in Illinois and North Carolina, supporting OEM onshoring and expanding reach.

• Minimal customer overlap and strong OEM relationships drive robust margin performance and support strategic goals.

Financial terms and conditions

• Total cash consideration of $140.5 million, subject to customary adjustments, funded through cash and MEC's $250 million credit facility, with an additional $50 million committed by lenders.

• Accu-Fab delivered $61 million revenue and $14 million adjusted EBITDA in 2024, with a 23% EBITDA margin.

• Pro forma net leverage expected at 3x at closing, targeted to reduce to 1.5–2x within 18 months post-close.

• Transaction expected to be immediately accretive to net income, adjusted EPS, and EBITDA, excluding transaction costs.

• Expected 2025 contribution: $28–$32 million net sales and $6–$8 million Adjusted EBITDA.

Synergies and expected cost savings

• Estimated $3–$5 million in annual revenue synergies over 24 months by leveraging expanded customer base and footprint.

• $1 million in annual cost synergies expected by 2026 through lean manufacturing and MBX framework deployment.

• Identified $4–$6 million in potential annual revenue and cost synergies over the next 24 months.

• MBX framework and footprint integration expected to create cost synergies and working capital efficiencies.

• Accu-Fab's 50–60% capacity utilization offers near-term growth potential.