So here's what happens when two industrial companies decide to get together: one stock goes up 18% in premarket trading, and the other goes down 6.7%. That's the story Tuesday morning as Thermon Group Holdings (THR) announced a strategic combination with CECO Environmental (CECO) in a deal valued at approximately $2.2 billion.

Think of it this way: Thermon brings process heating to the party, while CECO brings environmental solutions. Put them together, and you get what the companies are calling a "world-class industrial solutions platform." The market seems to like the idea for Thermon shareholders, at least based on that premarket pop.

Now, let's talk about the money part, because that's where things get interesting. Thermon shareholders have options here. They can choose to receive either $10.00 in cash plus 0.6840 CECO shares, $63.89 in cash per share, or 0.8110 CECO shares per share. If they don't make an election, they'll get the mixed consideration. Based on CECO's closing price of $77.68 on February 23, 2026, that mixed option works out to about $63.13 per Thermon share.

Here's why that matters: that $63.13 represents a 26.8% premium to Thermon's closing price of $49.77 on that same February date. So Thermon shareholders are getting a nice bump just for showing up to the merger.

The deal is expected to close in mid-2026, assuming all the usual regulatory and shareholder approvals go through. CECO's CEO, Todd Gleason, will be running the show when the companies combine. When the dust settles, CECO shareholders will own roughly 62.5% of the combined company, while Thermon shareholders will own about 37.5%.

Speaking of CECO, the company reported having $33.1 million in cash and cash equivalents as of December 31. Not a huge war chest, but enough to help fund the cash portion of this deal.

So what exactly are these two companies creating? They're putting together what they call "highly complementary portfolios" across industrial thermal and environmental solutions. The idea is to create a market leader in several high-growth segments. The combined company will be positioned to benefit from what the announcement calls "long-term global tailwinds" - things like the energy transition, power generation, industrial reshoring, infrastructure investment, decarbonization, and stricter environmental regulations.

Translation: they think they can sell more stuff together than they could separately.

The companies also expect to find some savings by combining operations. They're targeting annual cost synergies of about $40 million within 36 months of closing the deal. That's real money that should flow to the bottom line.

Back to the stock action: Thermon Group Holdings shares were up 18.55% at $59.00 during premarket trading on Tuesday. The stock is trading at a new 52-week high, according to market data. Meanwhile, CECO Environmental shares were down 6.67% at $72.50.

So there you have it - one company's shareholders are celebrating, while the other's are taking a more cautious view. But both sets of shareholders will be part of what could become a significant player in the industrial solutions space if this combination delivers on its promise.