Chinese manufacturer Dingli is planning to increase its stake in Californian aerial lift manufacturer MEC Aerial Work Platforms from 25 percent to just under 50 percent - 49.8 percent to be precise - subject to the usual regulatory approval etc. The move is the first step towards acquiring the rest of the company's equity from majority shareholder Richard Spencer.
Although Dingli is increasing its holding, it does not plan to make any changes, on the contrary is keen to simply provide more capital and support to continue on the current trajectory that has seen the company grow from a relatively small north American manufacturer to a $400 million business, building well over 10,000 machines a year.
A MEC Nano 10-XD
The company is now planning to expand further with improvements to its production facilities, while establishing a new Dingli group research and development facility and a new parts centre.
MEC’s new 85ft 85J boom lift
President David White said: “Dingli’s manufacturing expertise and quality is truly world class and industry leading. We have had a great partnership and their production expertise and facilities are second to none, I am really excited for our future together. We have already been working together for several years, so it will be very much business as usual.”
Dingli acquired its current stake in MEC at the start of 2017 for £20 million and owns similar stakes in Magni Telehandlers, and German spider lift manufacturer Teupen, both of which also host a Dingli research and development centre.
Vertikal Comment
This is a good move for the MEC management team and its owner. Dingli has proven to be as good an owner as you could wish for, and both companies have benefited from the seven years of their partnership.
This is the first time that Dingli has shown any interest in taking more than a 25 percent holding in the three international manufacturers that it has invested in. The MEC move though will give the company a firm ‘domestic’ position in the North American market, where Chinese companies have faced challenges in recent years as certain competitors look to defend their home market using pollical connections and procedures.
It is possible that when Dingli decides the time is right to convert its ownership in MEC from a minority stake to a wholly owned business, it might just face and objection or two, although it is hard to see how such moves, if they were to occur, would have any validity or could gain any traction.
Comments