Modine Shares Jump As $1B Performance Technologies Merger Deal With Gentherm Takes Shape

The move is aimed at creating a larger player in thermal management solutions spanning multiple major markets.

• Before the transaction closes, Modine is expected to receive a cash distribution of about $210 million from the spun-off unit.
• Afterward, Modine holders will own approximately 40% of the combined company, with Gentherm shareholders holding the remaining 60%. 
• Modine will concentrate solely on its Climate Solutions segment, which targets growing markets like data center cooling. 

Modine Manufacturing Co. (MOD) announced on Thursday that it has entered into an agreement to merge its Performance Technologies unit into Gentherm, Inc. (THRM) through a Reverse Morris Trust transaction structured to be tax-free for Modine and its shareholders. 

This move is aimed at creating a larger player in thermal management solutions spanning multiple major markets.

Structure And Shareholder Stakes

Modine’s Performance Technologies business will be spun off and immediately merged with Gentherm in a deal valued at about $1 billion. 

Before the transaction closes, Modine is expected to receive a cash distribution of about $210 million from the spun-off unit. Afterward, Modine holders will own close to 40% of the new combined company, with Gentherm shareholders holding the remaining 60%. 

Following the announcement, Modine stock traded over 17% higher on Thursday morning. On Stocktwits, retail sentiment around the stock jumped to ‘bullish’ from ‘bearish’ territory the previous day. Message volume shifted to ‘high’ from ‘normal’ levels in 24 hours. 

Modine’s Refocused Strategy

Once the Performance Technologies division departs, Modine will concentrate solely on its Climate Solutions segment, which targets growing markets like data center cooling and commercial HVAC & refrigeration. 

“Combining Modine’s Performance Technologies business with Gentherm establishes two stronger, more focused companies, each equipped to serve its end markets more effectively, accelerate growth, and drive long-term value for shareholders, customers, and employees.”

— Neil Brinker, President and CEO, Modine

The performance technology merger will form a combined entity with diverse thermal management systems and improved engineering capabilities, positioning the business to compete across sectors such as power generation, commercial and heavy-duty vehicles, light vehicles, and medical applications. 

MOD stock has gained over 73% in the last 12 months. 

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