New York, Jan 30, 2026, 07:33 ET — Premarket
- Modine shares gained roughly 1.5% pre-market, following a 20% surge the previous day
- The company will spin off Performance Technologies and merge it with Gentherm through a tax-free deal
- Modine’s earnings report on Feb. 4 will be the next key update for investors tracking the separation and future outlook
Modine Manufacturing Co’s stock climbed roughly 1.5% in premarket action Friday, building on gains following its agreement to spin off the Performance Technologies division and merge it with Gentherm. (Public)
Shares jumped 20.3% to $176.72 Thursday, marking Modine’s largest single-day gain in months. Investors reacted to the company’s plan to spin off a climate-focused unit and grant shareholders ownership in the merged Gentherm entity. (Marketscreener)
This move is significant as Modine positions itself to capitalize on surging demand for cooling gear in data centers, alongside its established HVAC markets. The deal would transform Modine into a “pure-play” Climate Solutions firm, shedding its vehicle- and industrial-focused businesses.
The deal also delivers cash to Modine just as investors grow wary of debt and capital expenditures. Modine plans to channel the cash distribution from the transaction toward debt reduction, targeting a pro forma net leverage ratio—debt compared to earnings—under 1.0x.
Modine plans to spin off its Performance Technologies unit and merge it with Gentherm via a Reverse Morris Trust, a tax-efficient way to separate and combine businesses. The deal’s value is pegged at roughly $1.0 billion. Modine expects a cash payout near $210 million and will hand out about 21 million new Gentherm shares to its shareholders. CEO Neil Brinker called the timing “opportune” as the company pivots toward data center cooling and other growth sectors. (Modine)
Modine reported $1.6 billion in revenue from its Climate Solutions segment for the 12 months ending Sept. 30, 2025. The company expects that figure to near $2 billion in fiscal 2026, fueled by demand in data centers and HVAC technologies. It also projects 50% to 70% annual growth over the next two years in its data center business, according to current targets.
Performance Technologies, the division set for separation, offers air- and liquid-cooled thermal management solutions to the vehicle and power generation sectors. According to Modine, the unit posted roughly $1.1 billion in annual revenue and an adjusted EBITDA—a key measure of operating cash profit—around $123 million. The business employs close to 5,000 workers.
Gentherm and Modine announced their combined business will generate pro forma revenue of $2.6 billion. They expect to achieve about $25 million annually in cost synergies by merging operations, with net leverage around 1.0x. Gentherm CEO Bill Presley said the deal “accelerates” their strategy by expanding the company’s reach across end markets and enhancing its precision flow management capabilities. (Sec)
Nothing is set in stone yet. The companies expect to close the deal in the fourth quarter of calendar 2026, pending Gentherm shareholder approval, SpinCo financing, a routine IRS tax ruling, and regulatory sign-offs, along with other conditions. Delays or weaker demand in data centers or commercial vehicles might prompt investors to reconsider the premium the stock gained this week.
Gentherm shares dipped modestly in early Friday trading, as investors appeared cautious about the challenges ahead in meeting synergy targets through integration and execution.
Modine plans to report third-quarter fiscal 2026 results after the market closes Feb. 4. Investors will be watching closely for updates on the separation timeline, plans for managing debt, and spending related to data center cooling capacity.
