CECO Environmental to buy Met-Pro for about $202M

CINCINNATI (AP) -- CECO Environmental Corp. said Monday that it reached a deal to buy Met-Pro Corp., which makes pumps, filters and water-treatment equipment, for $202.1 million in cash and stock.

The deal calls for the Cincinnati-based air pollution control and industrial ventilation systems maker to pay $7.25 in cash and $6.50 in stock for each Met-Pro share. Met-Pro shareholders can choose to receive either $13.75 in cash or an equivalent value of CECO shares.

Based on Met-Pro's 14.7 million outstanding shares, the deal is worth $202.1 million. The companies valued the deal at about $210 million.

The combined price of $13.75 per share represents a 43 percent premium over Met-Pro's Friday closing stock price of $9.60. The Harleysville, Pa.-based company's shares leaped $3.55, or 37 percent, to $13.15 in morning trading, and set a 52-week high of $13.36 a short time after trading began. CECO shares slipped 12 cents to $11, after earlier trading as high as $11.98.

CECO said the acquisition creates a company that would have a leading share in the global market for air pollution control, product recovery and fluid handling technology. It also expands the company's product lineup and worldwide customer base.

CECO said it expects the deal to boost its earnings per share, margins and cash flow, while also generating about $9 million in cost savings over time. The combined company will have adjusted revenue of about $300 million, significantly boosted cash reserves and a strong balance sheet for continued growth, CECO said.

The deal, which has been approved by both companies' boards, remains subject to customary closing conditions, including shareholder approvals. CECO stockholders that own about 26 percent of the company's voting power have agreed to vote in favor of the deal and Bank of America has committed to provide $125 million in debt financing to help fund the cash portion of the deal, the company said.