Integrated Clean Air Solutions for Industry

CECO and Met-Pro

Combining Forces for a Stronger Tomorrow

April 22, 2013

2

Jeff Lang

Chief Executive Officer & Director

3

Forward Looking Statements

Information in this document contains forward-looking statements, which involve a number of risks and uncertainties. CECO Environmental Corp. (“CECO”) and

Met-Pro Corporation (“Met-Pro”) caution readers that any forward-looking information is not a guarantee of future performance and that actual results could differ

materially from those contained in the forward-looking information. All such forward-looking statements include, but are not limited to, statements about the

benefits of the business combination transaction involving CECO and Met-Pro, including future financial and operating results, the new company’s plans,

objectives, expectations and intentions and other statements that are not historical facts. 

The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the failure of CECO or Met-Pro

stockholders to approve the transaction; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from

the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain

relationships with customers, employees or suppliers; competition and its effect on pricing, spending, third-party relationships and revenues.  Additional factors that

may affect future results are contained in CECO’s and Met-Pro’s filings with the SEC.  CECO and Met-Pro disclaim any obligation to update and revise statements

contained in these materials based on new information or otherwise.

Important Information for Investors and Stockholders

 

This communication does not constitute an offer to sell or the solicitation of an offer to buy securities or a solicitation of any vote or approval.  This communication

is not a substitute for the prospectus/proxy statement CECO Environmental Corp. and Met-Pro Corporation will file with the SEC. Investors in CECO or Met-Pro

are urged to read the prospectus/proxy statement, which will contain important information, including detailed risk factors, when it becomes available.

The prospectus/proxy statement and other documents that will be filed by the Company and Met-Pro with the SEC will be available free of charge at the SEC’s

website, www.sec.gov, or by directing a request when such a filing is made to CECO Environmental Corp., 4625 Red Bank Road, Suite 200, Cincinnati, Ohio

45227, Attention: Investor Relations; or to Met-Pro Corporation, 160 Cassell Road, Harleysville, Pennsylvania 19438, Attention: Investor Relations. A final

prospectus/proxy statement will be mailed to CECO’s stockholders and shareholders of Met-Pro.

 

Non-GAAP

These slides may contain non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of historical or

future financial performance that excludes amounts that are included in the most directly comparable measure calculated and presented in accordance with GAAP

in the statement of income, balance sheet or statement of cash flows (or equivalent statements). In accordance with the requirements of Regulation G, the table in

the Appendix presents the most directly comparable GAAP financial measure and reconciles non-GAAP adjusted EBITDA to the comparable GAAP measure. 

Adjusted EBITDA is not calculated in accordance with GAAP, and should be considered supplemental to, and not as a substitute for, or superior to, financial

measures calculated in accordance with GAAP. 

Proxy Solicitation

CECO and Met-Pro, and certain of their respective directors, executive officers and other members of management and employees may be deemed participants in

the solicitation of proxies in connection with the proposed transactions. Information about the directors and executive officers of CECO is set forth in the proxy

statement for CECO’s 2013 annual meeting of stockholders and CECO’s 10-K for the year ended December 31, 2012. Information about the directors and

executive officers of Met-Pro is set forth in the proxy statement for Met-Pro’s 2012 annual meeting of shareholders and Met-Pro’s Form 10-K for the year ended

January 31, 2012. Investors may obtain additional information regarding the interests of such participants in the proposed transactions by reading the

prospectus/proxy statement for such proposed transactions when it becomes available.

Transaction Summary

4

Structure &

Consideration

Structure &

Consideration

(1)

(2)

Financial

Benefits

Financial

Benefits

Expect ~$9 million in annual cost synergies with full realization by CY2014

Strong margin uplift

Improved free cash flow performance

Highly accretive to EPS

Conditions &

Expected

Closing

Conditions &

Expected

Closing

Shareholder approval from both parties

NASDAQ approval

Other customary approvals and closing conditions

Expected close: September 2013

CECO has agreed to acquire Met-Pro for $13.75 per share in cash and/or CECO common stock

Stock

consideration:

$6.50

per

share

($97.1

million,

representing

~31%

ownership

in

pro

forma

entity)

(1)

Cash / Stock election: Met-Pro shareholders have the right to elect consideration in varying amounts of cash

or stock, subject to proration mechanism

Collar:

stock

consideration

exchange

ratio

equals

$13.75

per

share

divided

by

the

Parent

Trading

Price

(2)

,

provided that if the result of such calculation is less than or equal to 1.000x, the exchange ratio shall be 1.000x,

and if the result of such calculation is greater than or equal to 1.352x, the exchange ratio shall be 1.352x.

15 day volume-weighted average closing price was $11.96 as of April 19, 2013.  Stock consideration subject to floating exchange ratio and collar mechanism.

“Parent Trading Price” means the volume weighted average price of CECO common stock, as reported on the Nasdaq Global Market for the fifteen (15) consecutive trading days ending on the trading day immediately preceding the closing date.

Cash

consideration:

$7.25

per

share

($110.2

million)

(1)

Key Transaction Benefits

Combination Creates a New Class of Air Pollution Control Assets Poised to

Achieve Superior Growth

5

Strong strategic fit

Opportunity to consolidate highly fragmented market and become clear

independent market leader

Expanded global reach

1.

2.

3.

4.

5.

6.

Attractive market growth drivers underpin strong growth potential

7.

Experienced management with proven track records as public companies

8.

Poised to benefit from enhanced end-market and customer diversity

Highly financially compelling with enhanced scale

Poised to achieve significant synergies

Significant Benefits to CECO Shareholders

6

Significant majority ownership of the highly attractive CECO / Met-Pro combined

company

Stronger, more attractive industry competitor than CECO on standalone basis

Forms a premier global leader in air pollution control, fluid handling, filtration & equipment

solutions

Greater ability to penetrate higher growth geographies and end-markets

Benefit from increased scale and improved market liquidity

Participation in considerable value creation resulting from the combination

~69%

(1)

ownership of pro forma Company for CECO shareholders

Expect to realize ~$9 million in annual cost synergies

Combination with a highly complementary strategic partner with proven track record as

a public company

Benefit from increased size, diversification

Combination Significantly More Compelling than Standalone

(1)

Based on 15 day volume-weighted average closing price of $11.96 as of April 19, 2013.  Stock consideration subject to floating exchange ratio and collar mechanism.

Strong Strategic Fit

7

Filtration

Core Overlapping Competencies

Ventilation Systems

Catalytic Reduction

Equipment, Components, Parts

Filtration and purification equipment

Fluid handling equipment

Proprietary chemicals

Air pollution control equipment &

technology

Related parts and services for

industrial air systems

Ability to leverage unique trade knowledge, patents and manufacturing capabilities

Introduction of pumps business enhances margin profile while diversifying end-market exposure

Opportunity to Capitalize on Core Business Alignment

Strong complementary product portfolio creates “one-stop-shop” to best serve customers

Poised to Benefit from Enhanced End-Market and Customer Diversity

8

Combination enhances breadth and depth of end-market exposure to blue-chip customer base

Expansion results in natural hedge against market and customer-specific volatility

Unlocks significant cross-selling opportunities with access to over 11,500 active customers worldwide

Strong play to consolidate market and benefit from economies of scale and scope

Core Competencies

Pharmaceutical

Automotive

Chemical / Petro

Steel & Metal

Refinery

Industrial Manufacturing

Food Processing

Saltwater

Aquariums

Semiconductor /

Electronics

Municipalities

Universities

Hospitals

Government

Facilities

Industrial Ventilation

Traditional Power & Natural Gas

Power

Aerospace

Attractive Market Growth Drivers

9

Favorable Industry Dynamics Underpin Strong Growth Potential

Increasingly stringent air pollution control regulatory environment

U.S. EPA: Mandated air quality standards for power plants

OSHA: Established permissible exposure limits for contaminants

U.S. DOE: Promoting new technology growth in biomass and gasification

Shale revolution driving natural gas power generation

Consumption of natural gas expected to grow ~45% by 2035

Natural gas is expected to displace coal-fired plants

China’s rapid industrialization and focus on compliance

12th 5-Year Plan: All coal/oil fired thermal units must comply with significantly stricter air

pollution controls by January 1, 2014

Increased demand from refining and chemical processes

North American shale gas feedstock fundamentals drive manufacturing advantage

“Re-industrialization”

of North America: Many new industrial/manufacturing projects slated for

startup

Expanded Global Reach

10

Strengthened Geographic Footprint with Deep Emerging Market Exposure

Pro

forma

company

will

have

a

well-balanced

geographic

portfolio

of

assets

Combined

platform

enhances

ability

to

capitalize

on

emerging

market

growth

Well-established

presence

in

China,

India

and

Latin

America

Component Parts Facilities

Future Facilities

Agents

Contracting / Services Facilities

Engineered Equipment Facilities

CECO Headquarters

Mefiag Filtration Technologies

Filtration / Purification Technologies

Fluid Handling Technologies

Product Recovery/Pollution Control Technologies

Met-Pro Headquarters

CECO

Met-Pro

Experienced Management Teams with Proven Track Records of Success

11

Opportunity to Leverage the Strength of Two World-Class Management Teams

with Deep Industry, Operational and Technical Expertise

Key Management

Key Management

Jeff Lang

Benton Cook, CPA

Roland Bollman

Bruce Brashear

Jack Neiser

Bill Frank

Hilliary Jeffries

Raymond J. De Hont

Neal E. Murphy

Gennaro A. D’Alterio

Gregory C. Kimmer

Paul A. Tetley

Hans J.D. Huizinga

Chief Executive Officer and Director

Interim Chief Financial Officer, Corporate Controller

Executive Vice President, Services, Parts and Filters

Vice President, FKI-Buell

President, EFFOX Global

President, Adwest, CECO Abatement and Busch International

Vice President, HR & Administration

Chief Executive Officer and President

VP-Finance, Chief Financial Officer, Secretary and Treasurer

VP/GM Met-Pro Global Pump Solutions and Keystone Filters

VP.GM Met-Pro Environmental Air Solutions

VP/GM Strobic Air Corporation

Managing Director Mefiag BV and GZ Filter Systems and GM Mefiag

USA

Combination has Potential to Achieve Significant Synergies

Expected Annual Cost Synergies of ~$9 million by 2014

Significant Implied Liquidity Through Monetization of Real Estate

12

CECO / Met-Pro Cost Synergies

CECO / Met-Pro Cost Synergies

Operational Synergies

Manufacturing / Fabrication

Optimization

Value Creation

Value Creation

Cash Flow Synergies

Cash Flow Synergies

Monetization of Real Estate

Assets

Integration Efficiencies

~$2.3

~$9.0

$-

$2.0

$4.0

$6.0

$8.0

$10.0

2013E

2014E

Estimated Expected Synergies

Additional Potential Sources of Synergies

Further Upside Potential from Revenue Synergies

13

Potential Revenue Synergies

Potential Revenue Synergies

Abatement

Systems

Cross-Selling Opportunities

Cross-Selling Opportunities

•

Small, medium

and large RTOs

•

Some abatement

systems need

pre-filters

•

Engineering

Installations

•

MPEAS

manufactures

TOs, catalytic

oxidizers and has

a concentrator

•

MPEAS / Bio-

Reaction

•

Clamp together

duct components

for any (lab)

hoods and the

plenums

•

Duall Scrubbers

•

Strobic Air

•

Steel flanges,

expansion joints

Increased customer

penetration

Greater emerging market

presence

Benefits from scale &

technology platforms

1.

2.

3.

4.

Leverage service footprint to

grow aftermarket & recurring

revenue

Service &

Parts

Highly Financially Compelling with Enhanced Scale

14

(1)

Pro forma for the full year impact of the Adwest and Aarding acquisitions, representing $41.5 million of Sales.

(2)

Pro forma for the full year impact of the Adwest and Aarding acquisitions, representing $6.1 million of EBITDA.

(3)

Based

on

LTM

12/31/2012

combined

EBITDA

of

$40.4

million,

which

includes

full

year

impact

of

the

Adwest

and

Aarding

acquisitions,

representing

$6.1

million

of

EBITDA.

Includes

$2.25

million

in

pro

forma

synergies.

Total

pro

forma

debt

of

approximately

$95

million

at

rates

of

approximately

LIBOR

plus

175

–

200

bps.

($ Millions)

PF Leverage (w/ Syn.)

(1/31/2013)

(12/31/2012)

Standalone

CECO Plus

Aarding / Adwest

LTM Margin (%)

LTM Adj. EBITDA

LTM Sales

13.7%

$18.5

$135.1

14.3%

$15.8

$109.9

2.2x

(3)

14.1%

$40.4

(2)

$286.5

(1)

13.9%

$24.6

(2)

$176.6

(1)

Highly Favorable Financing Terms

Low leverage profile supported by strong cash flow to effectively service debt

Total

new

debt

of

approximately

$95

million

at

rates

of

LIBOR

plus

175

-

200

Strong revolver flexibility with $60 million total capacity

In Summary

15

Two Industry Leaders

Strong alignment with mega trends

Positive outlook for 2013 and beyond for both companies

Combined Strengths = Unique Value Creation Potential

Sector leaders serving high growth, attractive markets

Leading company with strong air pollution control, fluid handling and filtration platforms

Expected highly accretive to earnings and future growth

Day one winning combination for CECO and Met-Pro shareholders

Substantial cost and revenue synergies as well as and long-term value creation

opportunities

Strong balance sheet and cash flow to support growth and cash returned to

shareholders

Appendix

16

Reconciliation of Adjusted EBITDA

17

(12/31/2012)

Standalone

CECO Plus

Aarding / Adwest

(1)

Pro Forma

(1)

(1)

Pro forma for the full year impact of the Adwest and Aarding acquisitions.

Sales

$ 135.1

$   176.6

109.9

$

286.5

$

Net Income

10.9

$ 

14.3

$    

8.0

$   

22.3

$ 

Income Tax (Benefit)

4.5

6.1

3.8

9.9

Interest Expense

1.2

1.2

0.2

1.4

D&A

1.2

1.8

2.0

3.8

Option Wage Expense

0.7

0.7

0.9

1.6

Other

-

0.6

0.8

1.4

Adjusted EBITDA

18.5

$ 

24.6

$    

15.8

$ 

40.4

$ 

(1/31/2013)