CECO Environmental to Acquire Profire Energy for $125 Million
CECO Environmental Corp. (CECO) has announced a definitive agreement to acquire Profire Energy in an all-cash transaction valued at $125 million. The deal offers $2.55 per share, representing a 46.5% premium over Profire's closing price. Profire, a leader in burner management technology and combustion control systems, projects 2024 sales exceeding $60 million with adjusted EBITDA margins of approximately 20%. The acquisition aims to expand CECO's leadership in environmental solutions for industrial markets, leveraging Profire's installed base of nearly 100,000 burner management systems. The transaction is expected to close in Q1 2025, subject to customary conditions.
CECO Environmental Corp. (CECO) ha annunciato un accordo definitivo per acquisire Profire Energy in una transazione completamente in contante valutata a 125 milioni di dollari. L'accordo offre 2,55 dollari per azione, rappresentando un premio del 46,5% sul prezzo di chiusura di Profire. Profire, leader nella tecnologia di gestione dei bruciatori e nei sistemi di controllo della combustione, prevede vendite superiori a 60 milioni di dollari nel 2024 con margini di EBITDA rettificato di circa il 20%. L'acquisizione ha l'obiettivo di ampliare la leadership di CECO nelle soluzioni ambientali per i mercati industriali, sfruttando la base installata di quasi 100.000 sistemi di gestione dei bruciatori. Si prevede che la transazione si chiuda nel primo trimestre del 2025, soggetta a condizioni abituali.
CECO Environmental Corp. (CECO) ha anunciado un acuerdo definitivo para adquirir Profire Energy en una transacción totalmente en efectivo valorada en 125 millones de dólares. El acuerdo ofrece 2,55 dólares por acción, lo que representa una prima del 46,5% sobre el precio de cierre de Profire. Profire, líder en tecnología de gestión de quemadores y sistemas de control de combustión, proyecta ventas que superen los 60 millones de dólares en 2024 con márgenes de EBITDA ajustados de aproximadamente el 20%. La adquisición tiene como objetivo ampliar el liderazgo de CECO en soluciones ambientales para mercados industriales, aprovechando la base instalada de casi 100.000 sistemas de gestión de quemadores. Se espera que la transacción se cierre en el primer trimestre de 2025, sujeta a condiciones habituales.
CECO Environmental Corp. (CECO)는 Profire Energy를 인수하기 위한 최종 계약을 발표하였으며, 이 거래는 1억 2500만 달러에 달하는 전액 현금 거래입니다. 이 거래는 주당 2.55달러를 제안하며, 이는 Profire의 종가에 비해 46.5%의 프리미엄을 나타냅니다. 브너 관리 기술 및 연소 제어 시스템의 선두주자인 Profire는 2024년 매출이 6천만 달러를 초과할 것으로 예상하며, 조정된 EBITDA 마진은 약 20%에 이를 것으로 보입니다. 이번 인수는 CECO의 산업 시장을 위한 환경 솔루션 리더십을 확대하기 위한 것으로, 거의 10만 개의 브너 관리 시스템 설치 기반을 활용합니다. 거래는 기존 조건에 따라 2025년 1분기에 종료될 것으로 예상됩니다.
CECO Environmental Corp. (CECO) a annoncé un accord définitif pour acquérir Profire Energy dans le cadre d'une transaction entièrement en espèces d'une valeur de 125 millions de dollars. L'accord propose 2,55 dollars par action, représentant une prime de 46,5 % par rapport au prix de clôture de Profire. Profire, leader dans la technologie de gestion des brûleurs et des systèmes de contrôle de la combustion, prévoit des ventes supérieures à 60 millions de dollars pour 2024, avec des marges d'EBITDA ajustées d'environ 20 %. L'acquisition vise à renforcer la position de CECO en tant que leader des solutions environnementales pour les marchés industriels, en s'appuyant sur la base installée de près de 100 000 systèmes de gestion des brûleurs. La transaction devrait se conclure au premier trimestre 2025, sous réserve des conditions habituelles.
CECO Environmental Corp. (CECO) hat eine endgültige Vereinbarung zur Übernahme von Profire Energy in einer Bartransaktion im Wert von 125 Millionen USD angekündigt. Das Angebot beläuft sich auf 2,55 USD pro Aktie, was einem Aufschlag von 46,5 % gegenüber dem Schlusskurs von Profire entspricht. Profire, ein führendes Unternehmen im Bereich der Brennersteuerungstechnologie und der Verbrennungsregelungssysteme, rechnet für 2024 mit einem Umsatz von über 60 Millionen USD und einen bereinigten EBITDA-Margen von etwa 20 %. Die Übernahme zielt darauf ab, die Führungsposition von CECO im Bereich der Umweltlösungen für industrielle Märkte auszubauen, indem die installierte Basis von nahezu 100.000 Brennerüberwachungssystemen genutzt wird. Der Abschluss der Transaktion wird im ersten Quartal 2025 erwartet, vorbehaltlich der üblichen Bedingungen.
- Acquisition adds projected $60M in sales with 20% EBITDA margins
- 46.5% premium offered to Profire shareholders
- Access to Profire's installed base of 100,000 burner management systems
- Expected cost synergies through combined operations
- All-cash transaction of $125M could impact CECO's cash position
- Transaction subject to regulatory approval and closing conditions
Insights
This strategic acquisition marks a significant expansion for CECO Environmental. The
The deal's enterprise value of
This acquisition significantly strengthens CECO's position in industrial environmental solutions. Profire's burner management technology and combustion control systems are important for industrial efficiency and emissions reduction - a growing concern amid stricter environmental regulations. The integration creates substantial cross-selling opportunities, allowing CECO to offer comprehensive environmental solutions across its expanded customer base.
The technology synergy is particularly noteworthy as Profire's automation and control solutions complement CECO's existing environmental protection portfolio. This combination will enable more sophisticated, integrated offerings for industrial clients seeking to improve both operational efficiency and environmental compliance. The deal positions CECO as a more complete solution provider in the industrial environmental technology space.
Advances CECO’s Position as the Leading Environmental Solutions Provider in Industrial Markets
- Expands CECO’s leadership position in niche energy and industrial markets with expanded environmental solutions for mission critical applications
- Provides cost synergies and enhances Profire’s strategic growth by utilizing CECO’s established international operations and customer relationships
- CECO to host its Quarterly Earnings call today at 8:30 a.m. ET including further commentary regarding the transaction
DALLAS and LINDON, Utah, Oct. 29, 2024 (GLOBE NEWSWIRE) -- CECO Environmental Corp. (Nasdaq: CECO) (“CECO”), a leading environmentally focused, diversified industrial company whose solutions protect people, the environment and industrial equipment, and Profire Energy, Inc. (NASDAQ: PFIE) (“Profire”), a technology company providing solutions that enhance the efficiency, safety, and reliability of industrial combustion appliances, today announced a definitive agreement where CECO will acquire Profire, in an all-cash transaction.
Profire is a leader in burner management technology and combustion control systems that provide mission-critical combustion automation and control solutions and services to improve environmental efficiency, safety and reliability for industrial thermal applications globally. Profire estimates its 2024 sales to be greater than
“I am excited to announce the acquisition of Profire and we look forward to welcoming their tremendous organization to our portfolio of leading solution companies,” said Todd Gleason, CECO’s Chief Executive Officer. “With an installed base approaching 100,000 burner management systems and a growing industrial market product offering, we look forward to accelerating their global market expansion and introducing their high-efficiency solutions to more customers in industrial air and water. We are also confident that the increased scale and combined corporate organizations will generate meaningful efficiencies and synergies. The addition of Profire is another important step in our ongoing execution of programmatic M&A and we expect it will further advance our position as the leading environmental solutions provider in industrial markets.”
“We are extremely pleased to announce this transaction with CECO which is a testament to the value that has been created for Profire employees, customers and shareholders,” said Cameron Tidball and Ryan Oviatt, co-CEOs of Profire. “The combination of our well-established leadership in niche energy and industrial mission critical applications with CECO’s proven track record of acquiring and investing in companies to enhance their growth and create scale will unlock even more value for all constituents.”
Transaction Details and Timing
Under the terms of the agreement, a subsidiary of CECO (“Merger Sub”) will commence a tender offer to acquire all issued and outstanding shares of Profire common stock at a price of
The tender offer is subject to customary closing conditions, including that at least a majority of the outstanding shares of Profire’s common stock are tendered and not withdrawn in the tender offer and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The price represents a
Following a successful completion of the tender offer, including the satisfaction of certain customary conditions, CECO will acquire all remaining untendered shares of Profire common stock at the same price of
Upon completion of the transaction, Profire will become a wholly-owned subsidiary of CECO and shares of Profire’s common stock will no longer be listed on any public market. The parties anticipate that the combination will be completed in the first quarter of 2025.
Advisors
Stephens Inc. is serving as financial advisor and Mayer Brown LLP is serving as legal counsel to Profire.
CECO Environmental Corp. is being advised by Foley & Lardner LLP (Legal), and KPMG (tax).
ABOUT CECO ENVIRONMENTAL
CECO Environmental is a leading environmentally focused, diversified industrial company, serving a broad landscape of industrial air, industrial water, and energy transition markets across the globe through its key business segments: Engineered Systems and Industrial Process Solutions. Providing innovative technology and application expertise, CECO helps companies grow their business with safe, clean, and more efficient solutions that help protect people, the environment and industrial equipment. In regions around the world, CECO works to improve air quality, optimize the energy value chain, and provide custom solutions for applications including power generation, petrochemical processing, general industrial, refining, midstream oil and gas, electric vehicle production, polysilicon fabrication, battery recycling, beverage can, and water/wastewater treatment along with a wide range of other applications. CECO is listed on Nasdaq under the ticker symbol "CECO." Incorporated in 1966, CECO’s global headquarters is in Dallas, Texas. For more information, please visit www.cecoenviro.com.
ABOUT PROFIRE ENERGY, INC.
Profire Energy is a technology company providing solutions that enhance the efficiency, safety, and reliability of industrial combustion appliances while mitigating potential environmental impacts related to the operation of these devices. It is primarily focused in the upstream, midstream, and downstream transmission segments of the oil and gas industry. However, in recent years, Profire has completed many installations of burner-management solutions in other industries that will be applicable to expand the addressable market over time. Profire specializes in the engineering and design of burner and combustion management systems and solutions used on a variety of natural and forced draft applications. Its products and services are sold primarily throughout North America. It has an experienced team of sales and service professionals that are strategically positioned across the United States and Canada. Profire has offices in Lindon, Utah; Victoria, Texas; Midland-Odessa, Texas; Homer, Pennsylvania; Greeley, Colorado; Millersburg, Ohio; and Acheson, Alberta, Canada. For additional information, visit www.profireenergy.com.
SAFE HARBOR STATEMENT
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 and include, but are not limited to, statements regarding CECO's full year 2024 outlook, statements about CECO's expectations regarding the integration of Profire Energy, Inc., into CECO; the benefits of the acquisition of Profire Energy, Inc., and the expectations regarding the transaction's impact on CECO's strategic growth plan. We use words such as "believe," "expect," "anticipate," "intends," "estimate," "forecast," "project," "will," "plan," "should" and similar expressions to identify forward-looking statements. Forward-looking statements 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. Potential risks and uncertainties that could cause actual results to differ materially include risks regarding the parties’ ability to complete the proposed transactions in the anticipated timeframe or at all, the occurrence of any event, change or other circumstance that could give rise to the termination of the transaction agreement between the parties, the effect of the announcement or pendency of the proposed transaction on business relationships, operating results, and business generally, disruption of current plans and operations and potential difficulties in employee retention as a result of the proposed transaction, diversion of management’s attention from ongoing business operations, the outcome of any legal proceedings that may be instituted related to the proposed transaction, the amount of the costs, fees, expenses and other charges related to the proposed transaction, the risk that competing offers or acquisition proposals will be made, the achievement of the anticipated benefits of the acquisition, the ability of Profire to achieve its 2024 earnings guidance, our ability to successfully integrate acquired businesses and realize the synergies from acquisitions, as well as a number of factors related to our business, including the sensitivity of our business to economic and financial market conditions generally and economic conditions in our service areas; dependence on fixed price contracts and the risks associated therewith, including actual costs exceeding estimates and method of accounting for revenue; the effect of growth on our infrastructure, resources, and existing sales; the ability to expand operations in both new and existing markets; the potential for contract delay or cancellation as a result of on-going or worsening supply chain challenges; liabilities arising from faulty services or products that could result in significant professional or product liability, warranty, or other claims; changes in or developments with respect to any litigation or investigation; failure to meet timely completion or performance standards that could result in higher cost and reduced profits or, in some cases, losses on projects; the potential for fluctuations in prices for manufactured components and raw materials, including as a result of tariffs and surcharges, and rising energy costs; inflationary pressures relating to rising raw material costs and the cost of labor; the substantial amount of debt incurred in connection with our strategic transactions and our ability to repay or refinance it or incur additional debt in the future; the impact of federal, state or local government regulations; our ability to repurchase shares of our common stock and the amounts and timing of repurchases, if any; our ability to successfully realize the expected benefits of our restructuring program; our ability to successfully integrate acquired businesses and realize the synergies from strategic transactions; the unpredictability and severity of catastrophic events, including cyber security threats, acts of terrorism or outbreak of war or hostilities or public health crises, as well as management's response to any of the aforementioned factors; and our ability to remediate our material weakness, or any other material weakness that we may identify in the future that could result in material misstatements in our financial statements. Additional risks and uncertainties are discussed under "Part I – Item 1A. Risk Factors" of CECO's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and may be included in subsequently filed Quarterly Reports on 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. Except as required under the federal securities laws or the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to update or review any forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information about the Transaction and Where to Find It
The tender offer has not yet commenced. This communication is neither an offer to buy nor a solicitation of an offer to sell any securities of Profire Energy, Inc., nor is it a recommendation by Profire Energy, Inc., its management or board of directors that any investors sell or otherwise tender any securities of Profire Energy, Inc. in connection with the transactions described elsewhere in this communication. The solicitation and the offer to buy shares of Profire Energy, Inc.’s common stock will only be made pursuant to a tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal and other related materials that a subsidiary of CECO Environmental Corp. intends to file with the SEC. In addition, Profire Energy, Inc. will file with the SEC a Recommendation Statement on Schedule 14D-9 with respect to the tender offer. Once filed, investors will be able to obtain the tender statement on Schedule TO, the offer to purchase, the Recommendation Statement of Profire Energy, Inc. on Schedule 14D-9 and related materials filed with the SEC with respect to the tender offer and the merger, free of charge at the website of the SEC at www.sec.gov or from the information agent named in the tender offer materials. Investors are advised to read these documents when they become available, including the Recommendation Statement of Profire Energy, Inc. and any amendments thereto, as well as any other documents relating to the tender offer and the merger that are filed with the SEC, carefully and in their entirety prior to making any decisions with respect to whether to tender their shares in the tender offer because such documents contain important information, including the terms and conditions of the tender offer.
CECO Company Contact:
Peter Johansson
Chief Financial and Strategy Officer
888-990-6670
PFIE Company Contact:
Ryan Oviatt
Co-CEO & CFO
(801) 796-5127
Investor Relations Contact:
Steven Hooser
Three Part Advisors
214-872-2710
Investor.Relations@OneCECO.com
FAQ
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