On Monday, air pollution control company CECO Environmental (NASDAQ:CECE) announced it has acquired Dutch natural gas turbine exhaust systems maker Aarding Thermal Acoustics B.V. in a combined cash-and-stock purchase valued at $31.8 million.

In a statement describing the acquisition, CECO noted that it has been cooperating with Aarding for about three years now. Post-merger, CECO intends to incorporate Aarding into its existing natural gas equipment business, and to put Aarding's president, Martin Pranger, and vice president, Norbert Pieterse, in charge of it.

Financially, CECO Chairman Phillip DeZwirek predicted that Aarding will be "highly accretive to CECO shareholders" going forward. Getting the company at a fair price should help with that. CECO is paying $24 million cash upfront, plus $7.8 million in CECO shares, plus a potential "earn-out" of $7.2 million over the next five years. In total, this works out to a purchase price of no more than $39 million, and 1.15 times valuation on Aarding's $34 million in fiscal 2012 sales. By comparison, CECO's own shares fetch 1.17 times sales today.


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