Acquisition |
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| Acquisition | Note 2. Acquisition On July 1, 2025, the Company acquired 100% of the membership interests of Accu-Fab, LLC (Accu-Fab). The acquisition was consummated in accordance with the terms of the Purchase Agreement, dated May 23, 2025, among the Company, Accu-Fab and Tide Rock YieldCo, LLC (the Seller). The purchase price of the acquisition was $140,500, subject to customary adjustments for the amount of cash, indebtedness, net working capital and certain expenses of Accu-Fab as of the closing. The acquisition of Accu-Fab was structured as a stock purchase for accounting purposes. As of the closing of the acquisition, after taking into account the estimated adjustments, the Company paid the Seller a preliminary total net consideration of $141,185. The Company financed the acquisition by borrowing under its amended and restated credit agreement, as amended, as described in Note 4 – Debt, in the Notes to the Condensed Consolidated Financial Statements. With locations in Wheeling, Illinois and Raleigh, North Carolina, Accu-Fab is a vertically integrated manufacturing partner providing technology driven, cutting edge metal fabrication solutions to large OEMs. Accu-Fab offers value-added services including design, engineering, sheet metal fabrication and integration and specialized finishing. The acquisition enhances MEC’s strategic position by broadening its customer base and accelerating its entry into the rapidly growing datacenter & critical power infrastructure end markets. The Company accounted for the acquisition using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with MEC being the acquiring entity. Transaction costs related to the acquisition were expensed as incurred within other selling, general, and administrative expenses, and totaled zero and $1,548 for the three months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026 and 2025, transaction costs related to the acquisition were zero and $2,378, respectively. The aggregate purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The estimate of the excess purchase price over the estimated fair value of net tangible assets acquired was allocated to identifiable intangible assets and goodwill. The Company engaged an independent third party to assist with the identification and valuation of the acquired assets, including intangible assets. Management made significant estimates and assumptions when determining the fair value of assets acquired and liabilities assumed. These estimates include, but were not limited to, discount rates, projected future net sales, projected future expected cash flows, useful lives, attrition rates and growth rates. These measures are based on significant Level 3 inputs not observable in the market. The Company estimated the fair value of net assets acquired based on information available during the measurement period and as of June 30, 2026, the valuation process to determine the fair values of the net assets acquired during the measurement period was complete. During the three months ended June 30, 2026 the Company recorded a purchase accounting adjustment to other current liabilities relating to property tax accruals. This adjustment resulted in a $206 increase in other current liabilities with a corresponding increase in acquired goodwill. The fair value of the assets acquired and liabilities assumed were as follows:
The Company believes that the information gathered provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. Pro Forma Financial Information (Unaudited) In accordance with ASC 805, the following unaudited pro forma combined results of operations have been prepared and presented to give effect to the Accu-Fab acquisition as if it had occurred on January 1, 2025, the beginning of the comparable period, applying certain assumptions and pro forma adjustments. These pro forma adjustments primarily relate to the estimated depreciation expense associated with the fair value of the acquired property, plant and equipment, amortization of identifiable intangible assets, interest expense related to additional debt needed to fund the acquisition and the tax impact of these adjustments. Additionally, the pro forma adjustments exclude non-recurring expenses related to transaction costs, which were expensed as incurred, and include the sale of stepped-up inventory. The unaudited pro forma consolidated results are provided for illustrative purposes only, are not indicative of the Company’s actual consolidated results of operations or consolidated financial position and do not reflect any revenue and operating synergies or cost savings that may result from the acquisition.
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