New York, Jan 29, 2026, 12:47 (EST) — Regular session
- Modine shares jumped after a deal to spin off its Performance Technologies unit and combine it with Gentherm
- The transaction values the unit at about $1 billion and is structured as a tax-efficient Reverse Morris Trust
- Traders now look to Modine’s Feb. 4 earnings release for a read on data center cooling demand and margins
Modine Manufacturing Co shares were up 18.6% at $174.15 in afternoon trading in New York, after touching a session high of $182.44.
The move followed an announcement that Modine will spin off its Performance Technologies business and simultaneously combine it with Gentherm in a Reverse Morris Trust — a structure companies use to separate a unit and merge it with another firm in a way meant to avoid U.S. federal income taxes. (SEC)
Why it matters now: the deal leaves Modine as a “pure-play” climate solutions company, leaning harder into data center cooling and commercial HVAC and refrigeration. Chief executive Neil Brinker said Modine now targets 50% to 70% annual growth in its data center business over the next two years, putting it on track to top its prior $2 billion revenue goal for fiscal 2028. (GlobeNewswire)
In the transaction, Modine is expected to receive a $210 million cash distribution from the spun-off business before closing, while Modine shareholders would receive about 21 million newly issued Gentherm shares — valued by the companies at roughly $790 million — and end up with about 40% of the combined company. The deal values the transaction at about $1.0 billion, the filing showed. (SEC)
Bill Presley, Gentherm’s chief executive, said the combination would “further scale” thermal management solutions and expand into “fast-growing power generation” markets, while Brinker called the deal “a significant next step” in Modine’s shift toward higher-growth markets. (Yahoo Finance)
An investor presentation put pro forma revenue for the combined Gentherm/Performance Technologies business at $2.6 billion and flagged about $25 million of identified annual cost synergies. The deck also pointed to a 13% post-synergy adjusted EBITDA margin — a profit measure that strips out interest, taxes and non-cash charges, and excludes certain items companies say are non-recurring. (SEC)
Gentherm shares were little changed, down 0.1% at $36.02.
But the rally in Modine comes with a long runway and deal risk. The companies said the transaction is expected to close in the fourth quarter of 2026 and is subject to Gentherm shareholder approval, SpinCo financing, a tax ruling, and regulatory approvals, among other conditions. (Barchart)
Next up, investors will watch for deal filings — including Gentherm’s planned Form S-4 and a Form 10 for the spun entity — and for Modine’s third-quarter fiscal 2026 results, due after the market closes on Feb. 4, with a conference call on Feb. 5. (SEC)
