CECO Environmental Acquires Compass Water Solutions

CECO’s Short-Cycle Mix expands industrial water capabilities and broadens its water capacity

DALLAS, May 10, 2022 /PRNewswire/ — CECO Environmental Corp. (Nasdaq: CECE) (“CECO”)Compass Water Solutions, Inc. (“Compass”) is a leading supplier of membrane-based industrial water and wastewater treatment solutions that help customers achieve regulatory compliance with water discharge at the lowest cost., a leading industrial company that is focused on the environment and diversifies its business, today announced the acquisition of Compass Water Solutions, Inc. (“Compass”) CECO’s expanding industrial water technologies are further strengthened by the acquisition of Compass Water Solutions, Inc. (“Compass”), a leading global supplier of membrane-based industrial water and wastewater treatment systems.^brand.

CECO Environmental Corp. Logo (PRNewsfoto/CECO Environmental Corp.) (PRNewsfoto/CECO Environmental Corp.)

Compass generated approximately $11 Million20% increase in revenue by 2021, with double-digit EBITDA margins. The total purchase price was $12.5 millionIt was funded by a mixture of cash and loans. A total of 70% was paid at closing, with the remainder to be paid over a period two years. CECO anticipates that the acquisition will have a positive impact on total company EBITDA margins, earnings/share, and free cash flow in 2022.

CECO acquires CECO to expand its industrial water technology market. $250 millionExpected growth rates exceeding six percent through 2025 for industrial oily water and seawater reverse-osmosis applications. CECO believes that the Compass acquisition will unlock greater value through CECO’s existing US Navy expertise, international sales resources, and global engineering footprint. Expect higher sales due to the expected tighter water discharge regulations and hard-to-attain international certificates. Compass’s global installed base of over 8,000 systems has created a strong aftermarket parts & services business that makes up approximately 40% of the current revenues. With an average order of less than $250,000Compass boosts CECO’s short cycle business mix to approximately $100 million, or 30 per cent, of total 2021 revenue for the company.

“Compass provides critical engineered solutions as well as an experienced leadership team to our expanding industrial water capabilities. We are thrilled to welcome them to CECO,” stated the spokesperson. Todd GleasonCECO Environmental CEO. “CECO Environmental has acquired three industrial water companies in 2022. They share the same mission to protect people, the earth, and industrial equipment. These businesses, along with our global footprints and leading brands, will continue driving strong revenue growth and income growth in this market,” said Mr. Gleason.

COMPASS WATER SUGGESTIONS
Compass Water Solutions (“Compass”), a world leader in the engineering and manufacturing of membrane-based water and wastewater treatment system sales and service, is located in New York. Compass provides environmental compliance (“assurance against a leak”) to customers using high-capacity water separators (slop-water separators), reverse osmosis technology, water filtration, purification technology, and oil-water separators. The company’s brand, international certifications, global installation base, and almost 50 years of experience in multiple industries are all well-known. The company’s headquarters are in Tustin (California), and runs an ISO 9001 certified assembly line. Visit www.assemblyplant.com for more information www.compasswater.com

CECO ENVIRONMENTAL
CECO is a global leader for industrial fluid handling and air quality, serving a wide range of niche markets. CECO provides innovative technology and application expertise to help companies grow their businesses with safer, cleaner, and more cost-effective solutions that protect the environment. In regions around the world, CECO works to improve air quality, optimize the energy value chain, and provide custom Engineered Systems for applications including power generation, petrochemical processing, general industrial, refining, midstream oil & gas, electric vehicle production, poly silicon fabrication, battery recycling, beverage can, and water/wastewater treatment along with a wide range of other applications. CECO is listed on Nasdaq as the ticker symbol “CECE”. Visit www.ceco.com for more information. www.cecoenviro.com.

ADVISORS
Compass received financial advice from the McLean Group, while O’Melveny provided legal guidance. BDO USACECO had Dykema Gossett PLLC as its advisors.

SAFE HARBOR
This Press Release contains forward-looking statements. These statements, which are not historical facts, include statements about management’s beliefs, expectations and beliefs. They should be interpreted accordingly. These statements are based on management’s views, assumptions and future events. They include statements about CECO’s expectations regarding the integration and benefits of Compass into CECO and CECO’s expectations regarding the impact of the transaction on CECO’s strategic growth plan. Forward-looking statements are identified by words such as “believe”, “expect”,”anticipate,”,”intends,”,”estimate,”,”forecast,”,”estimate,”,”forecast,”,”project,”,”will,”plan,” and similar expressions. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Potential risks and uncertainties associated with the acquisition include those that may affect actual results. These include risks related to the achievement and integration of acquired businesses and realizing the synergies. Additional risks and uncertainties are discussed in “Part I Item 1A.” Risk Factors in the Annual Report on Form 10K of the Company for the fiscal year ended December 31, 2021. Many of these risks are beyond the control and predictability of management. If any of these uncertainties or risks materialize or if the assumptions prove wrong, actual results could differ in material aspects from those anticipated. Investors should not place undue trust in forward-looking statements. These statements reflect our views as of when the statement was made. Forward-looking statements are only accurate as of the date they were made. Except as required by the federal securities laws and the rules and regulation of the Securities and Exchange Commission we are not obligated to update or revise any forward-looking statement, regardless of whether it is due to new information or other future events.

Contact the company:
Matthew Eckl, Chief Financial Officer
(888) 990-6670

Contact Investor Relations:
Steven HooserThree Part Advisors, LLC
214-872-2710 | [email protected]

News Media:
Kimberly PlaskettCorporate Communications Director
[email protected]