General Rubber to be acquired by Dallas company

DALLAS—CECO Environmental Corp. reached an agreement Jan. 10 to purchase General Rubber Corp., a manufacturer of rubber expansion joints and other flow control products. The deal is expected to close in April, at which time GRC will be integrated into CECO's Effox-Flextor-Mader Inc. (EFM) joint venture with Chartwell Investments Entrepreneur & Founder Capital L.L.C.

While CECO, headquartered in Dallas, did not disclose the purchase price for GRC, it did note that the transaction would be financed by a mix of cash, debt and equity from the EFM joint venture.

The addition of GRC expands CECO's portfolio to include rubber expansion joints, ducting expansion joints, and industrial pinch and duck bill valves, bringing industry renowned brands Maxi-Joint, Flex-Valve and SoundZorber into the CECO fold.

The acquisition also more than doubles the CECO's addressable market size, going from $200 million to $500 million. And, with an average order size of about $100,000, GRC increases CECO's short cycle mix to 27 percent (from 22 percent).

The move also comes at a critical time, CECO said, noting that passage of the Infrastructure Investment and Jobs Act could "be a significant tailwind for water and pipeline markets."

"With this acquisition," CECO Environmental CEO Todd Gleason said in a statement, "we will be able to bring turnkey, environmentally friendly solutions that protect critical infrastructure, piping and flow controls for the water, wastewater and storm water markets."

In a letter notifying its customers about the pending acquisition, GRC President Lloyd Aanonsen and Executive Vice President Amy Hammarstrom noted that GRC expects "everything to remain business as usual" with the leadership team remaining in place.

"CECO gives us the size and scale to better support our customers in more places, an enterprise approach to doing business and greater financial support to help us invest in growth, technology and people," Aanonsen and Hammarstrom wrote in the letter.

Gleason, in a news release, echoed the sentiment, saying the combined companies will be better positioned to serve their customers.

"CECO is in the business of protecting people, the environment and industrial equipment, and the acquisition of GRC allows us to significantly enhance these efforts," Gleason said. " ... We are excited to work with the GRC management team who will make a strong impact on our focus to deliver environmental solutions for the general infrastructure and water and wastewater sectors."

Founded in 1950, GRC is both ISO-9001- and 14001-certified, and it claims it is the first rubber expansion joint manufacturer to earn the designations for quality management systems and environmental management systems, respectively.