CECO Environmental (CECO) M&A announcement summary

Deal rationale and strategic fit

• The combination creates a leading global industrial solutions provider with an $8 billion sales pipeline, accelerating transformation and expanding capabilities in power generation, electrification, data centers, industrial water, emissions management, and advanced heating solutions.

• The merger brings greater scale, a more balanced mix of long- and short-cycle business, and higher margins, improving revenue visibility and positioning for robust investment and expansion.

• Both companies bring complementary market relationships and product offerings, enabling cross-selling, deeper market penetration, and enhanced market position in key sectors.

Financial terms and conditions

• Updated 2026 guidance expects full-year orders over $2.2 billion, revenue between $1.275 billion and $1.375 billion, and adjusted EBITDA projected at $195 million to $225 million, up 20–25% year-over-year.

• Pro forma sales are projected at $1.5–$1.6 billion and EBITDA at $250–$280 million, with a 17% margin, excluding synergies.

• Net leverage is expected at 2.6x, improving to 2.3x with full synergy realization.

• Free cash flow is expected to be at least 55% of Adjusted EBITDA.

• Only seven months of Thermon results are included in 2026 guidance, with full-year impact reflected in pro forma figures.

Synergies and expected cost savings

• Integration management office is driving programs to achieve or exceed $40 million in announced cost synergies by year 3, with $5 million captured by end of 2026 and $30 million run-rate in 2027.

• Commercial synergies are expected to add 1–2 points of organic growth for the legacy business, with $5–$10 million in additional growth anticipated.

• Growth synergies include new product introductions and leveraging combined sales pipelines.