Modine has entered into a definitive agreement to spin-off its Performance Technologies business in a deal worth approximately $US1 billion.
The deal, which will combine Gentherm with its Performance Technologies business, will make Modine a pure-play climate solutions company.
The tax-free spin-off will establish Gentherm as a scaled leader in thermal management solutions and expand its technologies and capabilities in precision flow management.
It will enable the combined company to serve attractive end markets including power generation; commercial, heavy-duty & light vehicle and medical.
The combined company expects to realise significant value creation through cost synergies and incremental commercial opportunities including cross-selling, product integration, and new global markets.
On a pro forma basis the combined company had revenue of $2.6 billion.
Modine will retain its Climate Solutions businesses, creating a pure-play climate solutions company focused on the high-growth data centre and commercial HVAC & refrigeration end markets.
Modine will move forward with a streamlined business model and sharpened management focus on product innovation and high-growth, high-return initiatives, including organic and inorganic opportunities.
Following the transaction and without taking into account any overlapping shareholder ownership, Modine shareholders are expected to own approximately 40% of the combined company, and Gentherm shareholders are expected to own approximately 60%.
Modine Performance Technologies is a leading provider of highly engineered, mission-critical thermal management solutions — using both air-cooled and liquid-cooled technologies — across the vehicular and power generation end markets.
The business has a global footprint of 5,000 employees across 10 countries. It delivered annual revenue of approximately $1.1 billion.
Gentherm CEO, Bill Presley, said the engineered solutions of Modine Performance Technologies are well aligned to Gentherm’s four core technology platforms – Thermal Management, Air Moving Devices, Pneumatic Solutions, and Valves – creating significant cross-selling opportunities.
Gentherm board chair, Ron Hundzinski, described the deal as a strategic fit that preserves balance sheet strength and long-term value for shareholders and customers.
Modine president & CEO, Neil Brinker, said this is a significant next step for their remaining businesses as they continue to accelerate their transformation into a pure-play climate solutions company with a portfolio geared toward high growth markets.
“This transaction comes at an opportune time, allowing us to focus all of our resources on high-returning investments, including capacity expansions for data centre cooling solutions to meet the rapidly growing demands of our hyperscale and colocation data centre customers as well as targeted acquisitions to support other areas of the business,” Brinker said.
“With regards to the data centre market, our business has grown at an exponential rate and based on our current targets, we now anticipate 50% to 70% annual growth over the next two years, putting us on track to significantly exceed our previous $2 billion revenue goal for fiscal 2028.”
The combined company expects the transaction to generate approximately $25 million of annual synergies through cost optimisation and operational efficiencies with the deal closing in the fourth quarter of calendar year 2026.
Bill Presley and Jon Douyard will lead the combined company as CEO and CFO, respectively. Jeremy Patten will continue as President of Modine Performance Technologies, which is expected to operate as a division of Gentherm.
Modine Performance Technologies will retain its brand name, which Gentherm will acquire as part of the transaction. Gentherm’s Board of Directors will be expanded with the addition of two Board nominees designated by Modine in consultation with the Gentherm Board.
Modine will continue to be led by Neil Brinker and Michael Lucareli as CEO and CFO, respectively, and the current Board of Directors.