Compass Water Solutions
Dallas, Texas – May 10, 2022 – CECO Environmental Corporation (“CECO”), a leading environmentally focused, diversified industrial company whose solutions protect people, the environment, and industrial equipment, today announced it had acquired Compass Water Solutions, Inc. (“Compass”) a leading global supplier of membrane-based industrial water and wastewater treatment systems that help customers achieve regulatory compliance of water discharge at the lowest lifecycle cost.
CECO Environmental acquires Compass Water Solutions
Compass generated approximately $11 million of revenue in 2021 with double-digit EBITDA margins. The total purchase price was $12.5 million and was funded by a mix of cash and debt. Approximately 70 percent was paid at closing with the balance to be paid over a two-year period. CECO expects the acquisition to be accretive to total company EBITDA margins, earnings per share, and free cash flows in 2022.
With this acquisition, CECO expands its addressable industrial water technology market by over $250 million, with expected growth rates of over six percent CAGR through 2025 for industrial oily-water and seawater reverse osmosis applications. CECO expects the Compass acquisition to unlock greater value by leveraging CECO’s international sales resources, existing US Navy expertise, and global engineering and production footprint. In addition to market growth rates, the expected stricter water discharge regulations coupled with hard-to-attain international certifications are expected to drive higher sales. Compass’ installed base of over 8,000 systems worldwide has created a robust aftermarket parts and services business that represents approximately 40 percent of current revenues. Finally, with an average order size of less than $250,000, Compass increases CECO’s short-cycle business mix to approximately $100 million, or 30 percent, of a total company 2021 revenue.
“Compass adds critical engineered solutions, and an experienced leadership team, to our growing industrial water capabilities, and we are excited to welcome them to the CECO organization,” said Todd Gleason, CEO of CECO Environmental. “CECO has completed three industrial water acquisitions in 2022, and each shares our common mission to protect people, the environment, and industrial equipment. We expect that these businesses, when coupled with our global footprint and leading brands, will continue to drive strong revenue and income growth in this strategic market,” added Mr. Gleason.
About Compass Water Solutions
Compass Water Solutions (“Compass”) is a worldwide leader in the engineering, manufacturing, sales, and service of membrane-based water and wastewater treatment systems. Compass helps customers achieve environmental compliance of water discharge (“assurance against a spill”) at the lowest lifecycle cost using high-capacity oil-water separators, slop-water separators, reverse osmosis water-makers, water filtration, and purification technology. The company is widely recognized for its brand name, international certifications, global installed base, and nearly 50 years of application expertise serving multiple industries. The company is headquartered in Tustin, California, and operates an ISO 9001 certified assembly plant. For more information, please visit www.compasswater.com
To learn more about Compass Water Solutions’ reverse osmosis system, visit our Compass Water Solutions Reverse Osmosis webpage.
To learn more about Compass Water Solutions’ oily water separators, visit our Compass Sarex VG-Sep and Compass Ultra-Sep webpages.
About CECO Environmental
CECO is a global leader in industrial air quality and fluid handling serving a broad landscape of industrial and other niche markets. Providing innovative technology and application expertise, CECO helps companies grow their business with safe, clean, and more efficient solutions that help protect our shared environment. In regions around the world, CECO works to improve air quality, optimize the energy value chain, and provide custom Engineered Systems for applications including power generation, petrochemical processing, general industrial, refining, midstream oil & 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 “CECE.” For more information, please visit www.cecoenviro.com.
About Separator Spares & Equipment
Separator Spares & Equipment, LLC is Compass Water Solutions’ Authorized Distributor for Alabama, Florida, Kentucky, Louisiana, Mississippi, and Missouri. We are a Compass Water Solutions Trained and Authorized Service Center for reverse osmosis watermakers and oily water separators. We provide complete engineered systems, spare parts, consumables, and/or services for reverse osmosis freshwater makers and oily water separators.
To learn more about Compass Water Solutions’ reverse osmosis system, visit our Compass Water Solutions Reverse Osmosis webpage. To learn more about Compass Water Solutions’ oily water separators, visit our Compass Sarex VG-Sep and Compass Ultra-Sep webpages.