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LONDON, UK / ACCESSWIRE / October 6, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Thermon Group Holdings, Inc. (NYSE: THR) (“Thermon”), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=THR. The Company announced on October 04, 2017, an agreement to acquire 100% of the equity interests of CCI Thermal Technologies Inc. (“CCI”) and certain related real estate assets in an all-cash transaction valued at C$258 million. For immediate access to our complimentary reports, including today’s coverage, register for free now at:
Discover more of our free reports coverage from other companies within the Diversified Machinery industry. Pro-TD has currently selected Actuant Corporation (NYSE: ATU) for due-diligence and potential coverage as the Company announced on September 27, 2017, its financial results for Q4 FY17 and FY17 which ended on August 31, 2017. Tune in to our site to register for a free membership, and be among the early birds that get our report on Actuant when we publish it.
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About CCI Thermal Technologies Inc.
CCI is a leader in the development and production of engineered heating and filtration solutions for industrial and hazardous area applications. CCI markets its products through several diverse brands known for high quality, safety, and reliability, and serves clients in the energy, petrochemical, electrical distribution, power, transit, and industrial end markets globally.
Ciscan Industries was founded in 1964 in Edmonton, Alberta, and formed CCI following the acquisition of DriQuik in 2000. CCI has approximately 375 employees that support manufacturing and fabrication at five facilities located in Canada and the United States. For its fiscal year ended July 31, 2017, CCI generated approximately C$95 million in total revenue; net income of C$15.9 million; and adjusted EBITDA of C$22.5 million.
Reason for the Acquisition
Thermon stated that the acquisition of CCI supports the Company’s vision to be the world’s leader in industrial process heating solutions by diversifying its product portfolio and end market exposure. Thermon’s growth strategy is based, in part, on highly-complementary acquisitions that contribute proven technologies, products, enhanced scale, and access to attractive new end-markets. The acquisition will also strengthen Thermon’s financial profile and provide a platform for future growth and consolidation in an adjacent, fragmented $800 million market.
Under the terms of the agreement and plan of merger, Thermon has created an acquisition subsidiary that will acquire CCI and certain related real estate assets for C$258 million. The Company will fund the deal with cash on hand as well as a new senior secured debt facility.
CCI’s existing management team, led by President Bernie Moore, will continue to operate CCI from its Edmonton, Alberta headquarters.
Thermon expects to realize annualized run-rate cost synergies of approximately C$2.4 million during the fiscal year ending March 31, 2019. The Company expects one-time transaction related costs during the fiscal year ending March 31, 2018, of approximately USD$5.5 million, excluding financing fees. At the closing of the transaction, Thermon expects net leverage to be approximately 3.4x. The acquisition is expected to be accretive to operating margins, free cash flow, and GAAP earnings per share (EPS) in the fiscal year 2019.
Thermon stated that the financing for the transaction has been committed by JP Morgan Chase Bank, N.A. The new debt will be structured as a senior secured term loan facility of USD $250 million, and will also include a senior secured revolving credit facility of USD $60 million. Proceeds of the term loan facility will be used to fund the acquisition, certain fees, and expenses associated with the transaction, and to repay Thermon’s existing term loan.
Last Close Stock Review
On Thursday, October 05, 2017, the stock closed the trading session at $20.76, marginally up 0.29% from its previous closing price of $20.70. A total volume of 213.73 thousand shares have exchanged hands, which was higher than the 3-month average volume of 173.72 thousand shares. Thermon Group Holdings’ stock price surged 10.96% in the last three months, 2.37% in the past six months, and 1.91% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 8.75%. The stock is trading at a PE ratio of 53.78. At Thursday’s closing price, the stock’s net capitalization stands at $674.91 million.
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