CECO Environmental to Acquire Profire Energy for $125 Million
CECO Environmental Corp 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 on October 25, 2024. Profire, a leader in burner management technology and combustion control systems, estimates 2024 sales exceeding $60 million with adjusted EBITDA margins of approximately 20%. The acquisition aims to expand CECO's leadership in niche energy and 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 ha annunciato un accordo definitivo per acquisire Profire Energy in una transazione interamente in contante del valore di 125 milioni di dollari. L'accordo offre 2,55 dollari per azione, rappresentando un premio del 46,5% rispetto al prezzo di chiusura di Profire del 25 ottobre 2024. Profire, leader nella tecnologia di gestione dei bruciatori e nei sistemi di controllo della combustione, stima vendite superiori a 60 milioni di dollari nel 2024, con margini di EBITDA rettificati di circa il 20%. L'acquisizione mira ad espandere la leadership di CECO nei mercati energetici e industriali di nicchia, sfruttando la base installata di quasi 100.000 sistemi di gestione dei bruciatori di Profire. Si prevede che la transazione si chiuda nel primo trimestre del 2025, soggetta alle consuete condizioni.
CECO Environmental Corp 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 del 25 de octubre de 2024. Profire, un líder en tecnología de gestión de quemadores y sistemas de control de combustión, estima que las ventas de 2024 superarán los 60 millones de dólares con márgenes de EBITDA ajustados de aproximadamente el 20%. La adquisición tiene como objetivo expandir el liderazgo de CECO en mercados energéticos e industriales de nicho, aprovechando la base instalada de casi 100,000 sistemas de gestión de quemadores de Profire. Se espera que la transacción se cierre en el primer trimestre de 2025, sujeta a las condiciones habituales.
CECO Environmental Corp는 Profire Energy를 1억 2500만 달러의 전액 현금 거래로 인수하기 위한 확정 계약을 발표했습니다. 이 거래는 주당 2.55달러를 제공하며, 이는 2024년 10월 25일 Profire의 종가에 비해 46.5%의 프리미엄을 나타냅니다. Profire는 연소 관리 기술과 연소 제어 시스템의 선두업체로, 2024년 매출이 6천만 달러를 초과하고 조정된 EBITDA 마진이 약 20%에 이를 것으로 예상합니다. 이번 인수는 CECO의 틈새 에너지 및 산업 시장에서의 리더십을 확장하고 Profire의 거의 10만 개 설치된 연소 관리 시스템을 활용하는 것을 목표로 합니다. 이 거래는 2025년 1분기에 조건을 충족하는 대로 마감될 것으로 예상됩니다.
CECO Environmental Corp a annoncé un accord définitif pour acquérir Profire Energy dans une transaction entièrement payée en espèces d'une valeur de 125 millions de dollars. L'accord offre 2,55 dollars par action, représentant une prime de 46,5 % par rapport au prix de clôture de Profire du 25 octobre 2024. Profire, un leader dans la technologie de gestion des brûleurs et des systèmes de contrôle de la combustion, estime que les ventes de 2024 dépasseront 60 millions de dollars avec des marges EBITDA ajustées d'environ 20 %. L'acquisition vise à renforcer le leadership de CECO sur les marchés niche de l'énergie et de l'industrie, en s'appuyant sur la base installée de près de 100 000 systèmes de gestion des brûleurs de Profire. La transaction devrait se clôturer au premier trimestre 2025, sous réserve des conditions habituelles.
CECO Environmental Corp hat eine endgültige Vereinbarung zur Übernahme von Profire Energy in einer Bartransaktion mit einem Wert von 125 Millionen Dollar bekannt gegeben. Der Deal bietet 2,55 Dollar pro Aktie, was einen Aufschlag von 46,5 % gegenüber dem Schlusskurs von Profire am 25. Oktober 2024 darstellt. Profire, ein führendes Unternehmen in der Brennermanagement-Technologie und in der Verbrennungssteuerung, schätzt, dass die Umsätze 2024 60 Millionen Dollar übersteigen werden, mit angepassten EBITDA-Margen von etwa 20 %. Die Übernahme zielt darauf ab, die Führungsrolle von CECO in Nischenmärkten für Energie und Industrie auszubauen und die installierte Basis von fast 100.000 Brennermanagement-Systemen von Profire zu nutzen. Es wird erwartet, dass die Transaktion im ersten Quartal 2025 abgeschlossen wird, vorbehaltlich üblicher Bedingungen.
- Acquisition price represents a 46.5% premium over Profire's recent share price
- Profire projects 2024 sales over $60 million with 20% adjusted EBITDA margins
- Expected cost synergies through combined corporate operations
- Access to CECO's international operations for market expansion
- Significant cash outlay of $125 million for CECO
- Transaction subject to regulatory approval and closing conditions
Insights
This acquisition represents a significant strategic move in the industrial environmental solutions sector. The
The deal structure through a tender offer followed by a merger demonstrates a well-planned execution strategy. The enterprise value of
The merger combines complementary technologies in industrial combustion and environmental control systems. Profire's expertise in burner management technology and combustion control systems fills a important niche in CECO's environmental solutions portfolio. The integration potential is particularly strong in improving industrial thermal applications' efficiency and environmental impact.
The technology synergy extends beyond mere product combination - CECO's established international presence provides an immediate pathway for global expansion of Profire's solutions. This could accelerate market penetration in regions where environmental efficiency regulations are becoming increasingly stringent. The combined entity will be better positioned to address growing demands for environmentally conscious industrial solutions.
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, Texas 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, for CECO 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, CECO’s 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 CECO’s 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 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 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 CECO’s ability to repay or refinance it or incur additional debt in the future; the impact of federal, state or local government regulations; CECO’s ability to repurchase shares of its common stock and the amounts and timing of repurchases, if any; CECO’s ability to successfully realize the expected benefits of its restructuring program; CECO’s 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 CECO’s ability to remediate its material weakness, or any other material weakness that we may identify in the future that could result in material misstatements in CECO’s 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, each of CECO and PFIE 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 Solicitation/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 Solicitation/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 Solicitation/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
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