CINCINNATI and HARLEYSVILLE, Pa., April 22, 2013 /PRNewswire/ -- CECO Environmental Corp. (NasdaqGM: CECE), a leader in air pollution control technology systems, product recovery and filtration technology, has announced today it has entered into a definitive agreement to acquire Met-Pro Corporation (NYSE: MPR). Met-Pro is a leading global, niche-oriented provider of product recovery, pollution control, fluid handling and filtration solutions across multiple diversified end-markets. The transaction is expected to be accretive to CECO's earnings per share, margins and cash flow.
Pursuant to the terms of the definitive agreement, CECO will acquire all of the outstanding shares of Met-Pro common stock in a cash and stock transaction valued at a total of approximately $210 million, or $13.75 per share, which represents a 43% premium to Met-Pro's share price as of the close on April 19, 2013. The consideration includes $7.25 per share in cash and $6.50 per share in CECO common stock. Under the terms of the agreement, Met-Pro's shareholders may elect to exchange each share of Met-Pro common stock for either $13.75 in cash and/or shares of CECO common stock having an equivalent value based on the volume weighted average trading price of CECO common stock for the 15-trading day period ending on the date immediately preceding the closing of the acquisition, subject to a collar. Overall elections are subject to proration such that approximately 53% of the Met-Pro shares will be exchanged for cash and 47% for stock.
The completion of the acquisition is subject to standard closing conditions including the approval of the stockholders of both CECO and Met-Pro. The boards of directors of each of CECO and Met-Pro have unanimously approved the transaction. CECO stockholders who own approximately 26% of the voting power of CECO have signed voting agreements and irrevocable proxies to vote in favor of the transaction. Jefferies LLC served as financial advisor to CECO while William Blair & Company advised Met-Pro, both providing fairness opinions in connection with the transaction. Bank of America provided CECO committed debt financing of $125 million to support the cash portion of the transaction.
Highlights of the transaction include:
- Creates a clear global market leader in air pollution control, product recovery and fluid handling technology
- Products are highly complementary and provide a broader portfolio to service an expanding base of over 11,500 active customers worldwide
- Well-balanced geographic portfolio of products and services in key emerging markets
- Expects to generate approximately $9 million in cost synergies over time
- Benefit from significant cross selling and geographic opportunities which should increase revenues and margins
- Management of both companies will remain in leadership positions with Jeff Lang as Chief Executive Officer, Ray De Hont as Chief Operating Officer and Neal Murphy as Chief Financial Officer
- Combined company will have pro forma revenues of approximately $300 million, significantly enhanced liquidity for its shareholders and a strong balance sheet for continued strategic growth