April 22, 2013
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
(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
per share, which represents a 43% premium to Met-Pro's share price as of the close on
April 19, 2013
. The consideration includes
per share in cash and
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
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
& Company advised Met-Pro, both providing fairness opinions in connection with the transaction. Bank of America provided CECO committed debt financing of
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
, Chief Executive Officer of CECO stated, "We are very excited about the acquisition of Met-Pro. We believe this combination creates significant organic and inorganic opportunities to support continued growth in revenues, profitability and overall shareholder value. Furthermore, the combined businesses will offer a broader set of products and services through a truly end-to-end pollution control technology solution in an environment where customers are increasingly demanding comprehensive solutions from fewer vendors and service providers. Importantly, the combined businesses will be uniquely positioned to capitalize on fast growing end markets and secular trends supported by increasingly stringent levels of pollution control regulation, increasing global energy demand, emerging market dynamics, most notably in
, and a low cost natural gas environment, driving new plant construction in the U.S. and globally."
Ray De Hont, President and Chief Executive Officer of Met-Pro, commented, "Joining forces with CECO will greatly enhance our product portfolio depth, while improving both our global reach and our ability to serve our customers. Met-Pro's platform aligns well with CECO's family of companies and we believe it is truly a great fit that brings together two high-quality organizations with exceptionally talented people and complementary business models, capabilities and cultures. Together, we will be ideally positioned to continue to capture market share and achieve superior growth. On behalf of the entire Met-Pro team, I'd like to express my sincere enthusiasm."