Mayville Engineering Company, Inc. (MEC) Seals $140M Accu-Fab Acquisition Deal
A close-up of a heavy-duty machining tool forming a steel component.
The contract manufacturer, Accu-Fab, is known for precision metalwork and serves sectors including renewable energy and data infrastructure. With strong margins and long-term client relationships, Accu-Fab's acquisition is projected to be an immediate accretive to Mayville Engineering Company, Inc. (NYSE:MEC)'s Adjusted EBITDA, which at present stands at $52.42 million.
Jag Reddy, CEO of Mayville Engineering Company, Inc. (NYSE:MEC), perceives the acquisition as a strategic fit with the company's long-term growth plan. According to the CEO, the acquisition has the potential to expand operations in markets with high-growth opportunities and deliver margin-enhancing synergies.
In terms of numbers, Accu-Fab generated approximately $61 million in revenue and $14 million in Adjusted EBITDA in 2024. Mayville Engineering Company, Inc. (NYSE:MEC) expects the acquisition to contribute to a sales range of $28 and $32 million and an Adjusted EBITDA range of $6 and $8 million in 2025. Further operational efficiencies involve a $1 million annual cost savings by 2026.
Despite a Citi adjustment lowering the price target from $18 to $16 on April 14, analysts continue to hold a Buy rating for the company with a consensus target of $18.50. Parallel to the acquisition talks, the company's stock performance has increased by 26.82% over the past month.
While we acknowledge the potential of MEC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MEC and that has 100x upside potential, check out our report about the
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