Mayville Engineering acquires Accu-Fab for $140.5M

Mayville Engineering (MEC) announced a definitive agreement to acquire Accu-Fab, from strategic holding company Tide Rock for a total consideration of $140.5M, plus ordinary and customary adjustments. The proposed acquisition is expected to close during the Q3, subject to the satisfaction of customary closing conditions. Accu-Fab is a vertically integrated contract manufacturer providing technology-driven, cutting-edge metal fabrication solutions to large OEMs. Accu-Fab offers value-added services that include design, engineering, sheet metal fabrication and integration, and specialized finishing. Accu-Fab serves as a supplier to leading OEMs in the critical power infrastructure, data center and renewable energy end-markets. Accu-Fab operates state-of-the-art manufacturing facilities at two locations, Raleigh, North Carolina and Wheeling, Illinois, which include approximately 200,000 square-feet of manufacturing space. For the FY24, Accu-Fab recorded total net sales and Adjusted EBITDA of approximately $61M and $14M, respectively. Upon closing, the transaction is expected to be immediately accretive to MEC’s Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS, which excludes one-time transaction costs. MEC intends to fund the transaction through cash and borrowings under its existing $250M syndicated credit facility with Wells Fargo Bank, National Association, as administrative agent. Wells Fargo Bank and JPMorgan Chase Bank, have committed an additional $50M in incremental commitments under the credit facility, subject to customary conditions, to support the ongoing needs of the business, which will be documented as an amendment to the existing credit facility. At closing, MEC anticipates its pro-forma ratio of net debt to Adjusted EBITDA will be approximately 3.0x. Given the expected cash generation of the combined company, MEC intends to reduce its net leverage within the first eighteen months after the closing of the transaction to 1.5x – 2.0x. Based on current expectations and market conditions, the Company expects that the Accu-Fab acquisition will contribute $28M-$32M of net sales and $6M-$8M in Adjusted EBITDA for 2025. J.P. Morgan Securities is serving as financial advisor, The Keystone Group is serving as a strategic consultant, and Foley & Lardner is serving as legal counsel to Mayville Engineering Company.