Kemco Systems is proud to announce it has been acquired by CECO Environmental Corporation (Nasdaq: CECO) (“CECO”), a leading environmentally focused, diversified industrial company whose solutions protect people, the environment and industrial equipment. This partnership will elevate Kemco's product and service offerings, as well as enhance efforts in assisting customers in reaching their sustainability goals. The addition of Kemco to CECO’s Industrial Water group advances CECO’s capability to offer customers around the world a turnkey performance-enhancing engineered solution for water and wastewater treatment in a wide range of high-performance applications while expanding the CECO offerings to Kemco customers.
Kemco, founded in 1969, marks the third acquisition for CECO during 2023, and a continuation of CECO’s steady execution of its programmatic M&A strategy. The Kemco acquisition enhances CECO’s North American presence, extending the Company’s industrial water and wastewater treatment applications reach, adding new energy conservation and water recycling solutions, and expanding the addressable market into new high-value food processing, commercial laundry, and ready-mix concrete customer segments and end markets. Kemco generated full-year 2022 revenues of approximately $22 million and advances the Company’s stated goals of owning differentiated engineered solutions businesses with niche leadership positions and more short-cycle and aftermarket business.
“I am excited to welcome the Kemco team to CECO and confident that the combination will open new growth opportunities across attractive industrial water markets. The acquisition of Kemco is another important and strategic step to build upon our already strong and diversified industrial water capabilities, which we have been building with tremendous organic growth execution and the acquisitions of Compass Water, Index Water, DS21, and General Rubber,” said Todd Gleason, Chief Executive Officer, CECO Environmental. “Kemco has a tremendous reputation with its strong, blue-chip customer base and an installed base of more than 7,000 systems. When combined with our focused investment programs, we expect to add additional market-leading solutions and capabilities to further solve critical customer problems while delivering sustainable growth.”
Added Gleason, “While this acquisition helps expand our North American presence in the water and wastewater treatment market, CECO also has the opportunity to introduce these water recycling and energy conservation solutions globally as a new offering, especially in regions we already serve where companies are seeking ways to reduce water usage, recycle their wastewater streams, and conserve energy.”
Kemco’s leadership team will remain to drive the business and work across CECO’s other industrial water businesses to maximize solution selling and services.
“We are excited to join a company that is so well aligned with our mission of helping customers solve their water and energy challenges, and we expect to enhance our value delivery to customers seeking to reduce their environmental footprint while improving their profitability,” said Tom Vanden Heuvel, Vice President and General Manager of Kemco Systems. “Working with a group that is placing a greater emphasis on closing the water loop was an important element of our decision-making process. With CECO, we believe our customers will feel the difference that a bigger team with global reach and a broader technology base has to offer.”
Janney Montgomery Scott LLC and McDermott, Will & Emery, LLP served as advisors to Kemco for this transaction.
CECO Raises Full Year 2023 Outlook
CECO increased its full year 2023 outlook to reflect revenues forecasted to be at least $525 million, up approximately 24 percent year over year. The Company also updated its expected full year 2023 adjusted EBITDA forecasted to be at least $55 million, up approximately 30 percent year over year. The updated expected full year revenue and adjusted EBITDA guidance compares to the previous outlook, provided in August, of revenues of between $500 and $525 million and adjusted EBITDA of between $50 and $55 million.
“The combination of our continued strong execution in healthy industrial markets and growing backlog, coupled with the acquisition of Kemco Systems, gives us added visibility and bolsters our confidence in our full year growth and profitability,” stated Gleason. “We continue to steadily transform CECO and create a high-performance industrial growth company. The acquisitions we have completed over the past 24 months continue to deliver performance at or above the high-growth financials associated with each transaction, which helps CECO to advance leadership positions in Industrial Air, Industrial Water and the Energy Transition markets.”
About CECO Environmental
CECO Environmental is a leading environmentally focused, diversified industrial company, serving a broad landscape of industrial air, industrial water and energy transition markets across the globe through its key business segments: Engineered Systems and Industrial Process Solutions. Providing innovative technology and application expertise, CECO helps companies grow their business with safe, clean, and more efficient solutions that help protect people, the environment and industrial equipment. In regions around the world, CECO works to improve air quality, optimize the energy value chain, and provide custom solutions for applications including power generation, petrochemical processing, general industrial, refining, midstream oil and 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 under the ticker symbol "CECO." Incorporated in 1966, CECO’s global headquarters is in Dallas, Texas.
About Kemco Systems
Since 1969, Clearwater, Florida-based Kemco Systems has delivered more than 7,000 systems worldwide for industrial Water Reuse/Recycle, Wastewater Treatment, Wastewater Filtration, Efficient Hot Water Heating, High-Pressure Pumping, Wastewater Heat Recovery, Stack Heat Recovery, Water Chilling, Vapor/Steam Curing and Conditioning, and Total System Monitoring. Kemco’s systems are built to the highest standards for the most challenging conditions and offer exceptional reliability, outstanding quality and top value for its client’s energy dollar.