Finally, CECO Environmental Corp. (CECE) has completed the acquisition of Met-Pro Corporation (:MPR). The intention to acquire Met-Pro was previously announced on Apr 21, 2013 and Met-Pro shareholders’ decision regarding the form of merger consideration they wish to receive was revealed earlier this week.
On Aug 14, CECO Environmental had announced that it expects to close the proposed merger with Met-Pro Corporation between Aug 27 and 29.
CECO now becomes a market leader in air pollution control, product recovery and fluid handling technology. The products and offerings of both the companies perfectly complement each other and provide a wider portfolio of services. CECO is expected to serve a customer base of more than 11,500 worldwide. 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.
Apart from this, the acquisition will benefit CECO with a well-balanced geographic portfolio of products and services in key emerging markets. The transaction is expected to be accretive to CECO's earnings, margins and cash flow. The combined company expects to generate revenues of about $300 million and $9 million in cost synergies once operational.
According to the terms of the agreement, CECO purchased all the outstanding shares of Met-Pro’s common stock in a cash and stock transaction. The deal was valued at approximately $210 million, or $13.75 per share, reflecting a 43% premium to Met-Pro's share price as of Apr 19, 2013 (the closing date prior to the merger announcement). In addition, the purchase includes $7.25 per share in cash and $6.50 per share in CECO common stock.
On Aug 27, shareholders of Met-Pro held a meeting, wherein bout 67% of Met-Pro shareholders who held approximately 9,808,910 Met-Pro shares decided to receive cash consideration while about 20% holding approximately 2,982,534 Met-Pro shares decided to receive stock consideration. However, about 13% of the shareholders did not give any consent about the consideration.
Since the decision to receive cash consideration was oversubscribed, it was decided that these shareholders will receive a combination of the cash and stock consideration as per the merger agreement. Those who decided to receive stock consideration or who did not make a valid election will receive all stock consideration.
CECO Environmental currently has a Zacks Rank #3 (Buy). Some other companies operating in the same industry and worth considering at the moment are Progressive Waste Solutions Ltd. (BIN), Sharps Compliance Corp. (SMED) and Pure Cycle Corporation (PCYO). Progressive Waste Solutions carries a Zacks Rank #1 (Strong Buy), while Pure Cycle Corporation has a Zacks Rank #2 (Buy).
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