Good morning, my dears,
Yesterday I joined CECO $CECO (+13,89 %) yesterday.
That's why I wanted to explain my motives to you again today.
CECO has been on my watch for a long time because I think their business model has a lot of potential.
I have already given you a company presentation on CECO.
Why am I investing right now, even though the entire market is going a bit crazy. And there is uncertainty at CECO because of the merger.
CECO Environmental announces strategic merger with Thermon Group, creating a global industry leader in providing mission-critical environmental and thermal solutions
February 24, 2026
The company's share price has fallen by almost 30% since the merger was announced. Although very good figures were presented.
Because it is perhaps human to immediately see the risks and be skeptical.
(Perhaps it is evolutionary and could be due to fear of losses)
⚠️ Risks
- Dilution: CECO issues shares, diluting existing shareholders (CECO holds 62.5% after merger).
- Financing risks: The transaction contains a cash component → potentially higher debt.
- Integration risk: Two companies with different cultures and systems must be merged.
But I clearly see the advantages outweighing the risks. And that's why I have now used the share price slide to enter the market.
"NO RISK, NO FUN"
🔹 Key messages from the CECO - Thermon merger
🧩 Strategic significance
- CECO and Thermon merge to create a global industry leader for environmental, process heating and thermal solutions.
- Transaction value: approx. USD 2.2 billion (shares + cash).
- The combined company will continue to operate under the name CECO Environmental.
🚀 Industrial & technological advantages
- Adds Thermon's strong position in process heating, heat tracing and temperature management to CECO's environmental and emissions solutions
- Strengthens presence in long-term growth trends such as energy transition, decarbonization, infrastructure, industrial transformation
- Offers customers a broader range of mission-critical solutions (air quality, emissions control, water treatment, thermal management)
💰 Financial effects
- Expected cost synergies: ~ USD 40 million annually within 36 months.
- Greater diversification through increased share of aftermarket and short-cycle business.
- Expected double-digit sustainable growth through broader market presence.
👥 Corporate structure & management
- CEO remains Todd Gleason (CECO).
- New board includes two Thermon directors.
- Ownership distribution after closing: CECO 62.5 %, Thermon 37.5 %.
📈 Offer for Thermon shareholders
Three choices per share (with allocation mechanisms):
- USD 10 cash + 0.6840 CECO shares (default if no election is made).
- 63.89 USD cash.
- 0.8110 CECO shares.
- Implied value of the standard option: USD 63.13 per share (26.8% premium).
📅 Timetable
- Transaction expected to close mid-2026, subject to regulatory and shareholder approvals
👍 Positive
- Massive portfolio expansion: Thermon strengthens CECO in process heating, temperature management and heat tracing - all areas with structural growth (energy transition, decarbonization, infrastructure)
- Greater diversification: more aftermarket sales → more stable cash flows.
- Economies of scale: USD 40 million synergies improve margins and cash flow.
- Stronger market position: CECO becomes a global provider of environmental and thermal solutions - an attractive, growing segment.
- 🎯 Conclusion for CECO shareholders
- Potentially very value-enhancing in the long term - but integration and debt must be managed properly.
🟧 Overall strategic impact
🌍 Industry position
- The new CECO will become a leading provider of environmental, emissions and thermal solutions.
- Strong exposure to energy transition, infrastructure, decarbonization, industrialization - all long-term growth drivers.
💵 Financial impact
- Synergies + broader customer base + aftermarket share → more stable, higher margins.
- Potential for double-digit growth, as CECO itself emphasizes
As a short-term GAMECHANGER is that both companies serve the oil and gas industry.
Thermon also serves the semiconductor industry.
My dears,
I would therefore like to briefly introduce you to the Thermon Group in the next part.
I would like to ask you to write your opinion on my new investment in the comments.
Do you share my view that the opportunities and synergies of the merger are greater than the risk?
Two champions have come together here.
World market leader in industrial process heating
Thermon Group Holdings, Inc. offers solutions for industrial process heating. The company specializes in providing complete solutions for flow assurance, process heating, temperature maintenance, freeze protection and environmental monitoring. The company's advanced industrial heating and filtration solutions span several categories, such as environmental heating (under the Ruffneck, Norsemen and Catadyne brand names), process heating (under the Caloritech brand name), filtration (under the 3L Filters brand name), rail and transit (under the Hellfire, Velocity, ArcticSense and other brand names) and boilers (under the Vapor Power, Precision Boilers and Caloritech brand names). The company offers a comprehensive range of products including heaters, electrode and gas boilers, heating cables, industrial heating blankets and related products, temporary power solutions and tube bundles. It also offers services that include engineering, installation and maintenance services, as well as software that includes design optimization and wireless and network control systems.
Number of employees: 1,568
CECO Environmental + Thermon Group — Strategic Combination
USD in millions
Estimates
Year Turnover Change
2025 498,2 0,72 %
2026 523,3 5,03 %
2027 554,4 5,95 %
2028 591,2 6,64 %
Year EBIT Change
2025 79,76 5,82 %
2026 82,78 3,8 %
2027 94,71 14,4 %
2028 107,7 13,68 %
Year Net result Change
2025 53,52 3,74 %
2026 57,11 6,72 %
2027 64,24 12,49 %
2028 74,76 16,36 %
Net debt not available
Year Free cash flow Change
2026 52,1
2027 56,1 7,68 %
2028 64,6 15,15 %
Year EBITDA margin EBIT margin
2025 21,92 % 16,01 %
2026 22,57 % 15,82 %
2027 22,71 % 17,08 %
2028 23,68 % 18,21 %
Year Earnings per share Change
2025 1,57 3,97 %
2026 1,718 9,43 %
2027 1,914 11,41 %
2028 2,17 13,38 %
Year P/E ratio PEG
2025 17.7x 4.45x
2026 27.3x 2.9x
2027 24.5x 2.1x
2028 21.6x 1.6x
Market value 1,542
Number of shares (in thousands) 32,848
Date of publication 22.05.2025
