MEC's acquisition of Mid-States Aluminum will expedite its growth in lightweight materials production

Mayville Engineering Company, Inc. (MEC), a leading value-added provider of design, prototyping, and manufacturing solutions to a wide range of end markets, has signed a definitive agreement to acquire Mid-States Aluminum Corp., a Wisconsin-based industry-leading extruder, for approximately $96 million. MEC will gain additional fabrication capabilities due to the purchase, positioning the firm as a leading domestic manufacturing partner for big OEMs. Mid-States Aluminum will also be able to extend its capabilities as a result of this.

The agreement will also provide MEC with other additional benefits:

• Mid-States will offer MEC with manufacturing capabilities for lightweight materials. These capabilities will position MEC even better to exploit the demand generated by multi-year onshoring and energy transition trends.
• The Mid-States will give an additional domestic manufacturing footprint. Mid-State's facilities will be easily integrated into MEC's current network and process flow due to their location. MEC expects no major impact on either company's activities throughout the integration phase, slated to terminate by the end of 2023.
• New cross-selling possibilities with current clients will be available in the Mid-States. Many of MEC's long-standing clients in the commercial vehicle, power sports, agricultural and construction, and access industries have immediately expressed a desire for aluminium manufacturing capabilities. MEC can actively address this customer need via Mid-States, resulting in substantial revenue synergies.
• The Mid-States will broaden MEC's service capabilities in expanding adjacent areas, notably new technologies. This includes battery electric cars, where the need for lightweight material product design, engineering, and manufacturing solutions is growing.

"[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. 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," said Jag Reddy, president and Chief Executive Officer at MEC.

Mid-States Aluminum, founded in 1964, is a vertically integrated producer of bespoke aluminium extrusions and fabrications with two state-of-the-art facilities in Fond du Lac, Wisconsin, totalling 325,000 square feet of production area. Design, engineering, extrusions, fabrication, anodizing and finishing, assembly, and packaging are among the value-added services provided by the firm.

"Customer demand for fabrications expertise within aluminum and other lightweight materials continues to increase. 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," added Jag Reddy.

It works with major OEMs in the building and construction, recreational, medical, agricultural, transportation, and other diversified end sectors. Mid-States Aluminum reported total sales and adjusted EBITDA of roughly $86 million and $16 million for the fiscal year 2022, resulting in an adjusted EBITDA margin of more than 18 per cent.