Gentherm Wins Shareholder Approval for Modine Spin-Off Combination
Gentherm shareholders backed the all-stock Reverse Morris Trust with Modine’s Performance Technologies unit, clearing the last major hurdle before an October 1 close.
Gentherm (THRM) shareholders approved the combination of Modine’s Performance Technologies business with the thermal-management company, clearing the last major hurdle before a planned October 1, 2026 close.
At a special meeting, about 99% of votes cast on the share-issuance proposal were in favor, and about 94% of outstanding Gentherm shares entitled to vote supported a charter amendment to increase authorized common stock. Final results, certified by the inspector of elections, were to be reported in a Form 8-K.
The deal is an all-stock Reverse Morris Trust in which Modine (MOD) spins off Performance Technologies and simultaneously combines that unit with Gentherm, intended to be tax-free for Modine and Modine shareholders for U.S. federal income tax purposes. The companies have received all required regulatory approvals, including a Private Letter Ruling from the Internal Revenue Service on U.S. federal income tax consequences. The final exchange ratio will be announced at closing and remains subject to adjustment under the merger agreement.
Gentherm, a global market leader in thermal management and pneumatic comfort technologies, will expand its portfolio through the combination with complementary thermal products and precision flow-management capabilities. The combined company is expected to serve power generation, commercial, heavy-duty and light vehicle, and medical end markets, with value creation through cost synergies, cross-selling, product integration, and entry into new global markets.
The transaction was valued at about $1.0 billion, or about 6.8 times post-synergy adjusted EBITDA, with Modine and Gentherm shareholders expected to own 40% and 60% of the combined company. Modine was to receive a $210 million cash distribution via SpinCo debt proceeds, subject to adjustment. The combined company is expected to be EPS accretive by year two, with pro forma net leverage of about 1.0 times.
Gentherm President and CEO Bill Presley said, “We appreciate the continued support of our shareholders for this important transaction. This transaction accelerates our transformation to building a higher growth and higher margin, thermal and precision flow management business. The combined business is well positioned to drive meaningful profitable growth across multiple attractive end markets.”
The deal creates a stronger enterprise with an expanded product portfolio and broader end-market exposure. Modine Performance Technologies is expected to operate as a division within Gentherm and keep its brand name, with group headquarters remaining in Novi, Michigan. Jeremy Patten was to continue as president of Modine Performance Technologies, and Gentherm’s board was to add two Modine nominees.
The transaction was expected to close in the fourth quarter of 2026, subject to Gentherm shareholder approval, SpinCo financing, an IRS tax ruling, and customary conditions. With shareholder approval and the IRS ruling now in hand, the remaining path is the October 1 close and announcement of the final exchange ratio.