CECO Environmental (CECO) The 38th Annual Roth Conference summary

Strategic rationale and combination benefits

• The combination of two industrial leaders aims to create a double-digit growth company with 20%+ EBITDA margins, leveraging complementary strengths and global scale for long-term growth over the next three to five years.

• The merger is expected to solidify a 'rule of 30, rule of 40' company profile, uncommon in the industrial sector, with significant commercial and operational synergies.

• Both organizations have admired each other's market leadership and see the merger as a way to accelerate strategic plans and capitalize on mutual respect and operational overlap.

• Thermon gains access to expanded operational infrastructure, especially in Korea and China, and new opportunities in the power sector through the partner’s established relationships.

• The combined entity is positioned for enhanced global opportunities, scale, and efficiency, with a focus on growth for years to come.

Commercial and operational synergies

• Significant commercial synergies are expected from integrating controls platforms and leveraging each company’s strengths in air and water solutions.

• The combined sales pipeline of $6.5 billion over the next two years provides insight into customer needs and opportunities for cross-selling, especially in large power projects.

• Thermon’s products, such as heat tracing and immersion heaters, will be integrated into large-scale projects, creating millions in new commercial opportunities.

• Recent collaboration has already resulted in new bids and specifications for Thermon products in major projects, with commercial teams energized by the merger.

• The merger enables both companies to accelerate conversations and offerings in new product categories and markets.

Market trends and growth drivers

• Thermon has diversified away from oil and gas, now generating over 70% of revenue from other sectors, including industrial, chemical, power, and data centers.

• The company’s triple D strategy—Decarbonization, Digitalization, Diversification—has driven a shift to 83% recurring OpEx revenues and 9% annual top-line growth since 2017.

• New product launches in medium voltage and liquid load banks target growth in electrification and data centers, expected to contribute 5%-7% growth.

• Customer CapEx spending is up 26% year-over-year, with secular growth drivers expected to sustain double-digit growth through fiscal 2027.

• The business is positioned to benefit from macro trends in electrification, data centers, and global industrial expansion.