Dive Brief:
- Filtration technology provider CECO Environmental Corp. has agreed to acquire Thermon Group, a maker of heat tracing cables, boilers and other industrial equipment, as part of a $2.2 billion cash-and-stock deal.
- The Texas-based companies said the combination will expand CECO’s portfolio beyond air pollution control, fluid handling and filtration equipment to better handle growing demand in power generation, industrial reshoring and energy transitions.
- The transaction, which is expected to close in mid-2026, was unanimously approved by both companies' boards of directors. CECO said it will continue to be led by CEO Todd Gleason and traded under its current name on the Nasdaq stock exchange following the deal’s approval.
Dive Insight:
The transaction will create a more “balanced” company in terms of revenue, Gleason said in an earnings call Tuesday. Up to 80% of CECO’s revenue comes from mid- to long-cycle projects, he said. Thermon has more short-cycle sales, which could help drive steadier margins and productivity for CECO.
“We see this combination as a powerful strategic fit that significantly advances our position as a premier engineered solutions provider,” Gleason said.
CECO, founded in 1966, makes products that reduce harmful pollutants such as carbon monoxide, acid gases and air toxics, as well as particulate matter at factories and facilities, according to its website. Some of the major markets CECO serves are automotive, food and beverage, chemical and defense and aerospace.
The company finished 2025 with fourth quarter revenue of $214.7 million, up 35% over the previous year. Its order backlog reached a record high, nearing $800 million during the three months that ended Dec. 31.
CECO also booked its “largest-ever” project, valued at $135 million, a natural gas power generation facility in Texas, Gleason said. Quarterly net income fell 37% to $3.1 million compared to the same period a year ago.
Looking ahead, Gleason said CECO’s record backlog gives the company strong 2026 momentum as it looks to combine with Thermon. Thermon is on track to deliver more than $520 million in revenue for the fiscal year ending March 31, he said, with a gross profit margin of 45%.
Together, the companies are expecting a total addressable market of more than $30 billion, factoring in customer trends in electrification, data center expansion and industrial water treatment. They also estimated the combination will generate $40 million in annual cost synergies over the next three years and be accretive in the first year of the merger.
CECO has seven manufacturing and assembly locations across the United States, according to its 2024 annual report. The combination, if approved, would expand its production capacity, with access to Thermon’s 11 manufacturing facilities around the world.
“Today’s announcement marks an important step forward in our evolution toward an integrated platform,” Thermon President and CEO Bruce Thames said in a statement.
