CINCINNATI, Sept. 8, 2015 /PRNewswire/ -- CECO
Environmental Corp. ("CECO," NasdaqGM: CECE), a leading global
environmental, energy and fluid handling technology company, today
announced that it has completed the previously announced
acquisition of PMFG, Inc. ("PMFG"). With combined pro forma
revenues of approximately $500
million, the acquisition of PMFG by CECO creates a premier
global industrial technology company in the environmental, energy
and fluid handling industries.
Today's announcement follows stockholder approval of the
transaction at each of the Special Stockholder Meetings of both
CECO and PMFG on September 2, 2015.
Stockholders from both companies overwhelmingly supported the
transaction. Following the close of the market on September 3, 2015, PMFG shares of common stock
ceased trading on the NasdaqGS.
CECO paid approximately $65
million in cash and issued approximately 7.6 million shares
of common stock of CECO to prior holders of shares of PMFG common
stock as consideration for the transaction. Based on the
closing share price of PMFG common stock on September 2, 2015, the transaction is valued at
approximately $138 million.
Accounting for existing cash on hand and acquired debt of PMFG, the
net value of the transaction is approximately $120 million.
Key Strategic Fundamentals
- Enhances our strategic and competitive position by broadening
our product portfolio and driving sales opportunities between the
respective CECO and PMFG portfolios.
- Strengthens significantly our value proposition to customers in
the growing global natural gas turbine market, by adding key
technologies such as SCR, SNCR, Separators and Silencers.
- Combines the leading global brand names in engineered systems
used in natural gas power generation industry, through the unique
combination of Peerless-Aarding-Effox. The
combined energy portfolio will provide a complete value-added
system to our customers.
- Creates an exciting Burgess-Aarding Silencer Technology group,
which will be a best-in-class noise abatement technology, with
marquee brands and a larger growing global footprint.
- Leverages the OneCECO sales initiative by enhancing our overall
portfolio to help drive greater revenue growth in our Environmental
and Energy Technology portfolios.
- Diversifies further our end-markets and provides an opportunity
to expand CECO's products into Europe, the Middle
East and Asia to build a
much larger global footprint.
- Enhances significantly our aftermarket and recurring revenue
strategy as the combined companies now have an installed base of
over $5 billion. Coupled with
our database of installed customer information, we will be able to
provide the tracking optics to assist our strategic aftermarket
sales and recurring revenue objectives.
- Expands our streamlined, asset-light manufacturing model across
the PMFG manufacturing base to create a highly flexible,
lower-cost, high quality global manufacturing footprint.
- Focus on reducing PMFG's operating infrastructure costs by
implementing our Operational Excellence model throughout the
organization by consolidating main offices, international sales
offices and manufacturing support staff synergies, in order to
achieve CECO's targeted SG&A, operating income and EBITDA
metrics as a percent of sales.
- Leverages the expertise of our demonstrated and successful
track record of integrating multiple businesses, including the 2013
acquisition of Met-Pro, wherein we significantly reduced the
purchase price multiple by exceeding our stated synergy
targets.
Jeff Lang, Chief Executive
Officer of CECO, stated, "The PMFG acquisition is a major milestone
in the evolution of CECO and is a truly excellent strategic
fit. The combination expands our end market segment reach,
broadens our portfolio of products and strengthens our global
geographic footprint, particularly in China, Europe
and the Middle East. It is also a
major step forward in our strategy to become a leader in the energy
and environmental segments. We expect the acquisition to generate
meaningful cost reduction synergies and global sales opportunities
through significant operating and manufacturing synergies, as well
as the opportunity to drive important recurring revenues and new
engineered equipment through an installed base of over $5 billion. It also provides us with sales
opportunities in our core end markets and gives us critical scale
with combined pro forma revenue of approximately $500 million. In addition, we expect that
the combination of PMFG's Asian business will bring additional
sales and manufacturing resources which will help us achieve our
$100 million revenue goal in the
region within three years.
"We have been diligently planning a successful post-combination
integration process for six months and the combined CECO-PMFG
management leadership team is very excited, fully aligned and
already making excellent progress towards our objectives,"
continued Mr. Lang. "Today, we have a broad and experienced global
leadership team in place to operate the business and integrate
successfully with a clear path to execute on our stated objectives.
The entire organization will be working together to achieve our
previously announced goal of $15
million of cost savings over the next 24 months and we
expect to capture approximately $5
million in annual savings by the end of 2015. I am proud to
welcome PMFG and their employees into the CECO family."
Jason DeZwirek, CECO's Chairman
stated, "We have long admired PMFG's leadership position in key
strategic markets such as SCR systems. By combining these two
companies, we have a great opportunity to create value for our
customers, stockholders and employees. We will continue our efforts
to build a leading global industrial technology company and I want
to thank the entire CECO organization for implementing our strategy
successfully."
ABOUT CECO ENVIRONMENTAL
CECO Environmental is a leading
global environmental, energy and
fluid handling technology company. Through its
well-known brands, CECO provides a wide spectrum of products,
custom-engineered systems and services including dampers
& diverters, cyclonic technology, thermal oxidizers, filtration
systems, scrubbers, exhaust systems, fluid handling equipment and
plant engineered services and engineered design build
fabrication. These products play a
vital role in helping companies
achieve exacting production standards, meeting
increasing plant needs and stringent emissions control regulations
around the globe. CECO believes that it globally serves the
broadest range of markets and industries including power,
municipalities, chemical, industrial manufacturing, refining,
petrochemical, natural gas infrastructure, metals, minerals &
mining, hospitals and universities. CECO is focused on
building long-term shareholder value by bringing its unique
technology, portfolio and operational excellence to strategic key
growth markets around the world, while maintaining the highest
standards of employee development, project execution and safety
leadership. CECO is listed on NASDAQ under the ticker symbol "CECE"
and is a member company of the Russell 2000 Index. For more
information on CECO Environmental, please visit the company's
website at http://www.cecoenviro.com or www.pmfginc.com.
Contact:
Corporate
Information
Jeff Lang,
Chief Executive Officer
Ed
Prajzner, Chief Financial Officer
1-800-333-5475
or
Shawn Severson
The Blueshirt Group
Phone: (415) 489-2198
Email: Shawn@blueshirtgroup.com
Safe Harbour
Any statements contained in this press release other than
statements of historical fact, including statements about
management's beliefs and expectations, are forward-looking
statements and should be evaluated as such. These statements are
made on the basis of management's views and assumptions regarding
future events and business performance. Words such as "estimate,"
"believe," "anticipate," "expect," "intend," "plan," "target,"
"project," "should," "may," "will" and similar expressions are
intended to identify forward-looking statements. Forward-looking
statements (including oral representations) involve risks and
uncertainties that may cause actual results to differ materially
from any future results, performance or achievements expressed or
implied by such statements. These risks and uncertainties include,
but are not limited to: our ability to successfully integrate
acquired businesses and realize the synergies from acquisitions,
including PMFG, as well as a number of factors related to our
business including economic and financial market conditions
generally and economic conditions in CECO's service areas;
dependence on fixed price contracts and the risks associated
therewith, including actual costs exceeding estimates and method of
accounting for contract revenue; fluctuations in operating results
from period to period due to seasonality of the business; the
effect of growth on CECO's infrastructure, resources, and existing
sales; the ability to expand operations in both new and existing
markets; the potential for contract delay or cancellation; changes
in or developments with respect to any litigation or investigation;
the potential for fluctuations in prices for manufactured
components and raw materials; the substantial amount of debt
incurred in connection with our recent acquisitions and our ability
to repay or refinance it or incur additional debt in the future;
the impact of federal, state or local government regulations;
economic and political conditions generally; and the effect of
competition in the product recovery, air pollution control and
fluid handling and filtration industries. These and other risks and
uncertainties are discussed in more detail in CECO's and PMFG's
filings with the Securities and Exchange Commission, including
their reports on Form 10-K and Form 10-Q. Many of these risks are
beyond management's ability to control or predict. Should one or
more of these risks or uncertainties materialize, or should the
assumptions prove incorrect, actual results may vary in material
aspects from those currently anticipated. Investors are cautioned
not to place undue reliance on such forward-looking statements as
they speak only to our views as of the date the statement is made.
All forward-looking statements attributable to CECO or persons
acting on behalf of CECO are expressly qualified in their entirety
by the cautionary statements and risk factors contained in this
press release and CECO's and PMFG's respective filings with the
Securities and Exchange Commission. Furthermore, forward-looking
statements speak only as of the date they are made. Except as
required under the federal securities laws or the rules and
regulations of the Securities and Exchange Commission, CECO
undertakes no obligation to update or review any forward-looking
statements, whether as a result of new information, future events
or otherwise.
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SOURCE CECO Environmental Corp.