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Acquisitions | 3 Months Ended
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Mar. 31, 2025
Business Combinations [Abstract] |
Acquisitions | 15. Acquisitions Profire Energy, Inc. On January 3, 2025, the Company acquired all outstanding shares of Profire for $122.7 million in cash, including $4.6 million of cash used to settle outstanding equity awards for which $2.3 million represents the acceleration of such awards and thus recorded within "Acquisition expenses" on the Condensed Consolidated Statements of Income. Resulting consideration transferred for the acquisition was $120.4 million. The transaction was financed through a combination of cash on hand and a draw on the Company's revolving credit facility. Profire is a technology company and provider of intelligent control solutions that enhance the efficiency, safety, and reliability of industrial combustion appliances. The business operates primarily from locations in Lindon, Utah and Acheson, Alberta and is reported within the Engineered Systems segment. T he following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of closing.
(in thousands) |  |  |
Current assets (including cash and cash equivalents of $22,675 and accounts receivable of $14,151) |  | $ | 54,867 |
Property and equipment |  |  | 17,416 |
Intangible - finite life |  |  | 41,810 |
Goodwill |  |  | 25,656 |
Other assets |  |  | 343 |
Total assets acquired |  |  | 140,092 |
Current liabilities assumed |  |  | (8,567 | )
Deferred income tax liability |  |  | (10,852 | )
Other liabilities assumed |  |  | (291 | )
Net assets acquired |  | $ | 120,382 |
The Company acquired property and equipment consisting of $14.7 million of land, building and improvements, $2.1 million of vehicles, and $0.6 million of machinery and equipment and other. The Company acquired technology, customer lists, and tradename intangible assets valued at $3.6 million, $34.5 million, and $3.7 million, respectively. These assets were determined to have useful lives of 7, 10, and 10 years, respectively. Verantis Environmental Solutions Group On December 17, 2024, the Company acquired 100% of the equity interests of Verantis for $65.5 million in cash, which was financed with a draw on the Company's revolving credit facility. Verantis is a global leader in engineering services and equipment systems and solutions for exhaust air treatment in a wide range of general industrial and high technology manufacturing processes. The business operates primarily from locations in Middleburg Heights, Ohio and Singapore and is reported within the Industrial Processing Solutions segment. T he following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of closing.
(in thousands) |  |  |
Current assets (including accounts receivable of $10,557) |  | $ | 21,107 |
Property and equipment |  |  | 373 |
Intangible - finite life |  |  | 22,070 |
Goodwill |  |  | 48,722 |
Other assets |  |  | 118 |
Total assets acquired |  |  | 92,390 |
Current liabilities assumed |  |  | (17,595 | )
Deferred income tax liability |  |  | (8,371 | )
Other liabilities assumed |  |  | (928 | )
Net assets acquired |  | $ | 65,496 |
The Company acquired technology, customer lists and tradename intangible assets valued at $2.4 million, $17.0 million and $2.6 million, respectively. These assets were determined to have useful lives of 7, 10 and 10 years, respectively. WK Group On October 2, 2024, the Company acquired 100% of the equity interests of WK Group for $6.8 million in cash, which was financed with a draw on the Company's revolving credit facility. As additional consideration in the acquisition of WK Group, the former owners of WK Group are also entitled to earn-out payments up to $27.5 million based upon specified financial results through September 30, 2025. Based on projections at the acquisition date, the Company estimated the fair value of the earn-out to be $6.3 million, recorded within "Accrued expenses" on its Condensed Consolidated Balance Sheets. This fair value measurement is based on inputs not observable in the market, which is considered Level 3 on the fair value hierarchy. WK Group designs and engineers a broad range of technical equipment and systems for exhaust and process air treatment, VOC abatement, energy recovery and surface treatment applications. The business operates primarily from locations in Germany, India, and Singapore and is reported within the Industrial Processing Solutions segment. T he following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of closing.
(in thousands) |  |  |
Current assets (including accounts receivable of $9,705) |  | $ | 20,294 |
Property and equipment |  |  | 853 |
Intangible - finite life |  |  | 3,114 |
Goodwill |  |  | 3,772 |
Other assets |  |  | 441 |
Total assets acquired |  |  | 28,474 |
Current liabilities assumed |  |  | (12,533 | )
Deferred income tax liability |  |  | (1,542 | )
Other liabilities assumed |  |  | (1,320 | )
Net assets acquired |  | $ | 13,079 |
The Company acquired technology, customer lists and tradename intangible assets valued at $1.0 million, $1.2 million and $1.0 million, respectively. These assets were determined to have useful lives of 7, 10 and 10 years, respectively. EnviroCare International LLC On July 29, 2024, the Company acquired 100% of the equity interests of EnviroCare International LLC (“EnviroCare") for $16.7 million, including $15.7 million paid at closing, which was financed with a draw on the Company's revolving credit facility, and a seller promissory note of $1.7 million, partially offset by a working capital adjustment of $0.7 million. EnviroCare is a designer and provider of industrial exhaust air contamination treatment and control and evaporative gas conditioning systems, solutions and services across a wide range of industrial and municipal applications. The business operates primarily from American Canyon, California and is reported within the Industrial Processing Solutions segment. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of closing.
(in thousands) |  |  |
Current assets (including cash of $596 and accounts receivable of $405) |  | $ | 3,111 |
Property and equipment |  |  | 17 |
Intangible - finite life |  |  | 7,250 |
Goodwill |  |  | 11,389 |
Total assets acquired |  |  | 21,767 |
Current liabilities assumed |  |  | (5,065 | )
Net assets acquired |  | $ | 16,702 |
The Company acquired technology, customer lists and tradename intangible assets valued at $0.8 million, $0.8 million and $5.7 million, respectively. These assets were determined to have useful lives of 7, 10 and 10 years, respectively. The acquisitions disclosed above are subject to final adjustment, primarily for the valuation of intangible assets pending final valuation results for such assets and tax balances for the further assessment of the acquiree’s tax positions. These preliminary estimates and assumptions could change significantly during the purchase price measurement period as the Company finalizes the valuation of assets acquired and liabilities assumed. These changes could result in material variances in the Company's future financial results, including variances in the estimated purchase price, fair values recorded and expenses associated with these items. Goodwill recognized represents value the Company expects to be created by combining the various operations of the acquired businesses with the Company’s operations, including the expansion into markets within existing business segments, access to new customers and potential cost savings and synergies. Goodwill related to these acquisitions is not deductible for tax purposes. Acquisition and integration expenses on the Condensed Consolidated Statements of Income are related to acquisition activities, which include retention, legal, accounting, banking, and other expenses. The following unaudited pro forma financial information represents the Company’s results of operations as if these acquisitions had occurred at the beginning of the fiscal year prior to the acquisition. The pro forma results have been prepared for informational purposes only and include adjustments to amortize acquired intangible assets with finite life, reflect additional interest expense on debt used to fund the acquisition, and to record the income tax consequences of the pro forma adjustments.
|  | Three months ended March 31, |  |
(in thousands, except per share data) |  | 2025 |  |  | 2024 |  |
Net sales |  | $ | 176,697 |  |  |  | 163,957 |  |
Net income attributable to CECO Environmental Corp. |  |  | 35,984 |  |  |  | 310 |  |
Earnings per share: |  |  |  |  |  |  |
Basic |  | $ | 1.03 |  |  | $ | 0.01 |  |
Diluted |  | $ | 0.98 |  |  | $ | 0.01 |  |
These pro forma results do not purport to be indicative of the results of operations that would have occurred had the purchase been made as of the beginning of the periods presented or of the results of operations that may occur in the future.

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