CECO Environmental Corp.
) merger moved a step ahead with the Met-Pro shareholders
electing the form of merger consideration they wish to receive in
the proposed merger transaction. The companies announced the
preliminary results of the elections held by Met-Pro stakeholders
to decide on the considerations.
On Aug 14, CECO Environmental had announced that it expects to
close the proposed merger with Met-Pro Corporation between Aug 27
and 29. However, the closure will depend upon approvals by
Met-Pro's and CECO's respective shareholders. The intention to
acquire Met-Pro was previously announced on Apr 21,
Following the merger, Met-Pro will become a wholly-owned
subsidiary of CECO. Met-Pro is a niche-oriented global provider
of product recovery, pollution control, fluid handling and
filtration solutions across multiple diversified end-markets.
According to the terms of the agreement, CECO will purchase
all the outstanding shares of Met-Pro's common stock in cash and
stock transaction. The total value of the deal is approximately
$210 million, or $13.75 per share, reflecting a 43% premium to
Met-Pro's share price as of Apr 19, 2013 (the closing date prior
to the merger announcement).
In addition, the purchase includes $7.25 per share in cash and
$6.50 per share in CECO common stock. Further, according to the
terms of the agreement, Met-Pro's shareholders may opt to
exchange each share of Met-Pro common stock for either $13.75 in
cash and/or shares of CECO common stock having an equivalent
value based on the volume weighted average trading price of CECO
common stock for the 15-trading day period ending on the date
immediately preceding the closing of the acquisition, subject to
a collar. Overall elections are subject to proration so that
roughly 53% of Met-Pro shares will be exchanged for cash and 47%
Coming back to Tuesday's meeting, about 67% of Met-Pro
shareholders who hold approximately 9,808,910 Met-Pro shares
decided to receive cash consideration while about 20% holding
approximately 2,982,534 Met-Pro shares decided to receive stock
consideration. However, about 13% of the shareholders did not
give any consent about the consideration.
Since the decision to receive cash consideration was
oversubscribed, it was decided that these shareholders will
receive a combination of the cash and stock consideration as per
the merger agreement. Those who decided to receive stock
consideration or who did not make a valid election will receive
all stock consideration.
In addition, it was also announced that anyone who bought
Met-Pro share between Aug 26, 2013 and till the effective time of
the merger, the investor will receive merger consideration
consisting of all stock consideration in accordance with the
proration procedures described in the merger agreement.
Further, if the transaction is closed as expected before Aug
30, 2013, then Met-Pro's quarterly dividend that was declared on
Jun 5, 2013 to shareholders of record at the close of business on
Aug 30, 2013 will not be paid to Met-Pro's shareholders.
Post acquisition, CECO will become a market leader in air
pollution control, product recovery and fluid handling
technology. The products and offerings of both the companies
perfectly complement each other and provide a wider portfolio of
services. After the acquisition, CECO expects to serve a customer
base of more than 11,500 worldwide. The combined businesses will
offer a broader set of products and services through a truly
end-to-end pollution control technology solution in an
environment where customers are increasingly demanding
comprehensive solutions from fewer vendors and service
Apart from this, the acquisition will benefit CECO with a
well-balanced geographic portfolio of products and services in
key emerging markets. The transaction is expected to be accretive
to CECO's earnings per share, margins and cash flow. The combined
company expects to generate revenues of about $300 million and $9
million in cost synergies once operational.
CECO Environmental currently has a Zacks Rank #3 (Buy). Some
other companies operating in the same industry and worth
considering at the moment are
Progressive Waste Solutions Ltd.
Pure Cycle Corporation
). Progressive Waste Solutions Ltd carries a Zacks Rank #1
(Strong Buy) while Pure Cycle Corporation has a Zacks Rank #2
PROGRESSV WASTE (BIN): Free Stock Analysis
CECO ENVIRNMNTL (CECE): Free Stock Analysis
MET-PRO CORP (MPR): Free Stock Analysis
PURE CYCLE CORP (PCYO): Free Stock Analysis
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