CECO To Buy Profire For $108 Mln Cash, Cuts Annual Revenue Outlook Below View, Pre-Market Stock Down

Profire Energy

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(RTTNews) - CECO Environmental Corp. (CECO), a provider of air pollution control products and services, announced on Tuesday that it has inked a deal to buy Profire Energy, Inc. (PFIE), a technology provider for industrial combustion appliances, for $2.55 per share or $108 million in cash. In addition, CECO has revised down annual revenue outlook, while initiating 2025 revenue guidance.

Under the terms, a subsidiary of CECO will commence a tender offer to acquire all shares of Profire at $2.55 per share. The transaction implies an equity value of around $125 million and a total enterprise value of approximately $108 million for Profire.

The price represents a 46.5 percent premium over Profire's closing share price of $1.74, and a premium of 60.3 percent to Profire's 30-day volume weighted average share price on October 25.

Post tender offer, CECO will acquire all remaining untendered shares of Profire at $2.55 per share.

Up on the completion of the transaction, which is expected in the first quarter of 2025, Profire will become a wholly-owned subsidiary of CECO, and shares of Profire's will no longer be listed.

For 2024, Profire expects sales of over $60 million with an adjusted EBITDA margin of around 20 percent.

Profire is a burner management technology and combustion control systems firm focused on combustion automation and control solutions.

Looking ahead to the full year, CECO now expects revenue of $575 to $600 million, compared with the earlier expectation of $600 million to $620 million.

On average, five analysts' polled by Thomson Reuters forecast the company to post revenue of $606.11 million, for the year. Analysts' estimates typically exclude special items.

Excluding items, annual adjusted EBITDA is projected to be $65 million to $70 million, lower than prior guidance of $68 million to $72 million.

For the full-year 2025, CECO anticipates revenue of $700 million to $750 million, with adjusted EBITDA of $90 to $100 million.

For the full-year 2025, analysts expect the firm to report revenue of $669.86 million.

CECO was trading down by 8.70 percent at $24.02 in the pre-market trade on the Nasdaq.

PFIE was trading up by 47.36 percent at $2.510 in the pre-market trade on the Nasdaq.