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CINCINNATI - CECO Environmental Corp. announced an acquisition Monday that could double the size of the company and lead to the relocation of its headquarters to Pennsylvania.
Oakley-based CECO (CECE) will pay $202 million in cash and stock to acquire Met-Pro Corp. of Harleysville, Pa. CECO makes air-pollution control equipment. Met-Pro makes filters, pumps and water filtration equipment. The combined companies are projected to have about $300 million in revenue and $40 million in pre-tax earnings, each roughly double what CECO now generates.
This is the third acquisition announced this year for CECO, which operates the Kirk & Blum metal fabrication plant on Creek Road in Blue Ash and employs about 20 at its Redbank Road headquarters. The combined companies will be led by CECO’s Jeffrey Lang, while Met-Pro CEO Raymond De Hont will become chief operating officer of the company post merger.
“We have several options for where the headquarters will be,” Lang said.
Cincinnati and Harleysburg are among the sites being considered in a search process that will take several months, he added.
The Met-Pro deal is the third acquisition announced this year by CECO. In January, it announced the $6 million acquisition of Adwest Technologies Inc., a California-based installer of air pollution abatement equipment. In March, it announced a $39 million deal to acquire a Dutch maker of natural gas exhaust systems and silencing technologies.
Lang told analysts and investors Monday morning that the Met-Pro acquisition has been under discussion for more than a year and is a strategic objective of CECO Chairman Phillip DeZwirek. The companies have few customers in common and are expected to generate more revenue on a combined basis than either could have achieved separately.
“We have a large footprint in China,” Lang said. “We can introduce Met-Pro products in China.”
CECO also has installation capabilities that it can offer to Met-Pro customers. Met-Pro has “unencumbered real estate” that could generate “north of $20 million” in sale-leaseback transactions, Lang added. Finally, the companies are expecting to eliminate $9 million in annual costs by combining operations.
The deal is subject to regulatory approvals and shareholder approval. It is expected to close in the third quarter of this year.
The transaction price of $13.75 per share represents a 43 percent premium over Met-Pro’s April 19 closing price. Met-Pro’s stock jumped 38 percent to $13.28 in early trading Monday, while CECO’s share price fell 5 percent to $10.59.
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