Modine to Combine Performance Technologies With Gentherm
The Reverse Morris Trust deal is expected to close October 1, 2026, creating a scaled thermal-management company with Modine shareholders owning 40%.
Modine (MOD) will spin off its Performance Technologies business and combine that unit with Gentherm (THRM) in a Reverse Morris Trust transaction expected to close on October 1, 2026, subject to customary closing conditions.
The structure was first outlined in January, when the two companies described a deal valued at about $1.0 billion, or about 6.8 times post-synergy adjusted EBITDA, with Gentherm shareholders expected to own 60% of the combined company and Modine shareholders 40%. Modine was to receive a $210 million cash distribution through SpinCo debt and about $790 million in Gentherm stock. The combined company would keep the Gentherm name and NASDAQ listing, with headquarters remaining in Novi, Michigan, and Performance Technologies operating as a division under its existing brand.
Gentherm, a global market leader in thermal management and pneumatic comfort technologies, completed key sign-to-close deliverables in July, and the combination remained on track for an early fourth-quarter close. The latest announcement pins that timeline at October 1.
The strategic case has been that the merger would lower the combined company’s light-vehicle exposure and add scale across power generation, commercial vehicles, heavy-duty equipment, medical and automotive climate and comfort. Gentherm’s four core platforms — Thermal Management, Air Moving Devices, Pneumatic Solutions and Valves — were described as aligned with Performance Technologies’ engineered products. Modine President and Chief Executive Officer Neil Brinker said combining the 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.”
Gentherm reported second-quarter product revenue of $416.2 million, up 11.0% from a year earlier, and raised full-year 2026 product-revenue guidance to $1.55 billion to $1.65 billion. Automotive Climate and Comfort Solutions revenue rose 14.1% year over year. The company also acquired Innovative Medical Equipment, LLC, and authorized a new $400 million stock-repurchase program. Its 2026 guidance, as of July, did not reflect any impact from the planned combination with Modine.
For Modine, the spin-off and combination accelerate a portfolio shift toward a pure-play climate solutions company focused on data-center cooling and specialty HVAC. Brinker said the remaining businesses would focus resources on high-returning investments, including capacity expansions for hyperscale and colocation data-center customers. Modine’s February investor materials projected fiscal 2026 sales growth of 20% to 25% and adjusted EBITDA of $455 million to $475 million for the climate-solutions franchise.
Closing still requires Gentherm shareholder approval, SpinCo financing, a customary IRS tax ruling, regulatory approvals and tax opinions. The Form S-4 and SpinCo Form 10 had not yet become effective as of Gentherm’s July update. Bill Presley, Gentherm’s president and chief executive, and Jon Douyard, its chief financial officer, are expected to lead the combined company, with Jeremy Patten continuing as president of Performance Technologies.