Fox Rothschild Helps Met-Pro to Close $210 Mil. Deal
By that time, CECO had successfully completed its restructuring and "the valuation gap was something that was negotiable," Nicholas said.
But whereas a merger of equals typically calls for equal representation of both companies on the combined board of directors, CECO made it clear that it wanted to control the newly-formed entity, according to Nicholas.
"We said to them, 'If you want control, you've got to pay for it,'" Nicholas said. "So then the deal shifts into a traditional acquisition."
From there the negotiations turned to determining how much Met-Pro was worth, and at first, Nicholas said, the two companies had very different numbers in mind.
"We wanted to get a fair price," Nicholas said. "There were no problems in the company that compelled us to sell. We were able to sit back and say, 'Look, we want to get our price and if we don't, we're comfortable with continuing with this very fine company.' It was not a stress situation where we were obliged to sell."
Nicholas said he and his team reminded CECO's representatives of that position a few times during the several rounds of negotiations over the purchase price.
"We let CECO know that whenever it was appropriate to do so," Nicholas said. "We knew they very much wanted to buy Met-Pro and we didn't need to sell."
Nicholas called the process "every deal lawyer's dream."
"It's very intense, very complicated and very challenging, both in terms of legal issues and logistical issues," Nicholas said. "You've got to have your eye on the [client's] employee base, the board of directors and the other party. You've also got to have your eye on the disclosure obligations of a public company. It's great stuff as a lawyer."
CECO eventually agreed to purchase Met-Pro for about $210 million, or $13.75 per share, Nicholas said.