Chinese aerial-platform manufacturer Zhejiang Dingli has signed an agreement to purchase 25% of U.S. aerial-lift manufacturer California Manufacturing & Engineering Company (MEC).
The agreement, under which Dingli would pay $20 million for 625,000 shares of MEC stock, is pending, subject to regulatory approval in both China and the United States. The deal is expected to be completed early in 2018.
Although a Dingli news release says the agreement is “mainly for purposes of promotion of brand value and expansion of marketing channel,” a MEC representative says there are no plans at this time for MEC to market Dingli brand products.
Dingli’s proposed buy-in will infuse $20 million in working capital into MEC, which will be available to help the U.S. aerial manufacturer to accelerate its growth in all areas, including new-product development, service support, and parts distribution. Dingli’s partial ownership of MEC will also strengthen the existing business arrangement between the two companies.
For at least the past few years, Dingli has been a major supplier of fabrications for MEC products, and MEC has been a major customer of Dingli’s. “MEC products have built a solid reputation for high quality and Dingli’s partnership aligns with that reputation,” said Deanne Hix, MEC’s vice-president of sales operations and strategic planning. She cited Dingli’s world-class manufacturing, extensive use of robotics, and economies of scale as key benefits of the relationship to meet increasing customer demand.
The two companies have also reportedly collaborated on the design of some existing MEC brand slab scissor lifts, including the newest MEC Micro 19.
David White, MEC president, said, “This investment level of partnership combines the world class manufacturing capability of Dingli with MEC’s 40 years of brand reputation for product innovation, quality and service and it sets the stage for our plans for significant growth.”
Dingli’s proposed arrangement with MEC follows just 2 years after the Chinese company purchased 20% of Italian telehandler manufacturer Magni, which manufactures and markets telehandlers worldwide, including in North America.