CECO Environmental Buys Dutch Maker of Natural Gas Turbine Exhaust Systems

On Monday, air pollution control company CECO Environmentalannounced it has acquired Dutch natural gas turbine exhaust systems maker Aarding Thermal Acoustics B.V. in a combined cash-and-stock purchase valued at $31.8 million.

In a statement describing the acquisition, CECO noted that it has been cooperating with Aarding for about three years now. Post-merger, CECO intends to incorporate Aarding into its existing natural gas equipment business, and to put Aarding's president, Martin Pranger, and vice president, Norbert Pieterse, in charge of it.

Financially, CECO Chairman Phillip DeZwirek predicted that Aarding will be "highly accretive to CECO shareholders" going forward. Getting the company at a fair price should help with that. CECO is paying $24 million cash upfront, plus $7.8 million in CECO shares, plus a potential "earn-out" of $7.2 million over the next five years. In total, this works out to a purchase price of no more than $39 million, and 1.15 times valuation on Aarding's $34 million in fiscal 2012 sales. By comparison, CECO's own shares fetch 1.17 times sales today.


The article CECO Environmental Buys Dutch Maker of Natural Gas Turbine Exhaust Systems originally appeared on Fool.com.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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