CECO Environmental (CECO) The 38th Annual Roth Conference summary

Strategic rationale and combination benefits

• The merger brings together two companies with strong momentum, aiming for double-digit growth and 20%+ EBITDA margins over the next several years.

• The combination creates a rule of 30/40 industrial company, rare in the sector, with significant scale and global opportunities.

• Both organizations have admired each other's market leadership and see the merger as a way to accelerate strategic plans and operational infrastructure, especially in Asia.

• The deal is expected to provide enhanced commercial and operational efficiencies, leveraging complementary strengths in process management and environmental solutions.

• The boards of both companies see the merger as a powerful move for growth over the next three to five years.

Commercial synergies and growth opportunities

• Significant commercial synergies are expected, particularly in controls and monitoring platforms, with opportunities to cross-sell products in air and water markets.

• The combined sales pipeline is $6.5 billion, with millions in commercial opportunities identified in large-scale power projects.

• Thermon's products, such as heat tracing and immersion heaters, will be integrated into major projects, leveraging existing relationships with OEMs like GE and Siemens.

• The merger enables both companies to accelerate conversations and offerings in new product categories, especially in power and industrial sectors.

• Early post-announcement bids and specifications show immediate low-hanging fruit for revenue growth.

Portfolio transformation and market trends

• Thermon has shifted from 65% oil and gas revenue to 28-30%, with 83% now recurring OpEx, driven by a triple D strategy: Decarbonization, Digitalization, Diversification.

• Over 70% of Thermon's revenues are now outside oil and gas, spanning general industrial, chemical, power, food, rail, semiconductor, and pharma.

• New product launches in medium voltage and liquid load banks target growth in electrification and data centers, supporting 5-7% growth from these lines alone.

• Customer CapEx spending is up 26%, with record engineering backlogs and expectations for continued secular growth over the next three to five years.

• The business is positioned for double-digit growth through fiscal 2027 and beyond.