Marwynn Holdings Inc. (NASDAQ:MWYN) saw its shares climb 20.6% in after-hours trading on Tuesday after the company announced it had signed a non-binding letter of intent - or LOI - to acquire a 51% equity stake in DJ Mex Corp., a U.S.-based firm that specializes in electronic-waste services.
Under the terms disclosed in the announcement, the acquisition, if completed, would fold DJ Mex into Marwynn’s EcoLoopX platform as a majority-owned subsidiary. Marwynn described EcoLoopX as a reverse supply-chain service for e-waste that handles sourcing, logistics coordination, and trading facilitation without engaging in physical processing operations. The current management team at DJ Mex would remain in place to continue day-to-day operations.
Executives from both companies commented on the proposed transaction. Yin Yan, Chief Executive Officer of Marwynn, said signing the LOI marked an "important milestone in the expansion of our EcoLoopX platform, which enhances Marwynn's ability to reposition its portfolio toward higher-value, recurring-revenue activities." Jeff Yang, Chief Executive Officer of DJ Mex Corp., noted the potential partnership would provide his company with "additional resources, strategic support, and access to capital markets to accelerate our growth." These statements were included in the companies' announcement.
Marwynn indicated the deal is intended to broaden its circular-economy network and strengthen capabilities in managing electronic waste and recyclable materials. The companies said the proposed transaction is expected to support cross-border supply-chain operations between the United States, Latin America, and Asia and to accelerate growth of Marwynn’s asset-light platform.
The proposed acquisition remains subject to customary contingencies. The companies noted that completion depends on due diligence, the successful negotiation of definitive agreements, and other customary closing conditions. Because the LOI is non-binding, the transaction is not guaranteed to close.
Market reaction to the announcement was immediate, with Marwynn shares rising sharply in after-hours trading. The companies did not provide additional financial terms or a timetable for completion as part of the disclosure.
Takeaway - Marwynn’s announced intent to buy a majority interest in DJ Mex aims to expand EcoLoopX’s footprint in e-waste sourcing and cross-border logistics, while retaining DJ Mex’s management. The deal is at an early stage and carries the usual execution risks.