A match made on Wallstreet, Gentherm (NASDAQ: THRM) and Modine (NYSE: MOD) agree to $1 billion thermal management merger

Gentherm (NASDAQ: THRM) and Modine (NYSE: MOD) announced a definitive agreement for a reverse Morris Trust transaction valued at approximately $1 billion that will combine Modine’s Performance Technologies business with Gentherm.

Under the transaction structure, Modine will spin off its Performance Technologies division and simultaneously merge it with Gentherm. Modine shareholders are expected to own approximately 40% of the combined company, while Gentherm shareholders will retain about 60%.

The deal represents approximately 6.8 times the last twelve months post-synergy adjusted EBITDA of $147 million as of September 2025. Modine will receive a cash distribution of $210 million from the spun-off entity, with shareholders receiving approximately 21 million newly issued Gentherm shares representing about $790 million in equity consideration.

Modine Performance Technologies generated annual revenue of approximately $1.1 billion and adjusted EBITDA of roughly $123 million. The business provides thermal management solutions across vehicular and power generation markets, employing about 5,000 people across 10 countries.

The combined company expects to realize approximately $25 million in annual cost synergies through operational efficiencies. On a pro forma basis, the merged entity would have generated $2.6 billion in revenue with a 13% adjusted EBITDA margin on a synergy-adjusted basis.

Following the transaction, Modine will focus on its Climate Solutions business as a pure-play climate solutions company, targeting the data center and commercial HVAC markets. The Climate Solutions segment generated $1.6 billion in revenue for the twelve months ended September 2025, with a 19.6% adjusted EBITDA margin.