Gentherm will merge with Modine Performance Technologies in a Reverse Morris Trust deal, making Gentherm the public company. The transaction is valued at approximately $1 billion, with Gentherm shareholders owning 60% and Modine shareholders owning 40%. The deal aims to double Gentherm’s scale and shift revenue towards commercial and heavy-duty markets.

The merger is expected to bring in about $25 million in cost synergies by the end of 2028 and target an EBITDA margin of 13%, aiming for the mid-teens. Revenue synergies are projected to be over $100 million. The combined company will focus on growth and expanding into new markets beyond light vehicles.

Gentherm executives see the deal as transformative, broadening their thermal management portfolio and engineering capabilities. The merger will allow Gentherm to access markets outside of light vehicles, including power generation and heavy-duty equipment. The company plans to leverage Modine’s established commercial channels for cross-selling opportunities.

The transaction is set to close in Q4 2026 pending Gentherm shareholder approval. Modine will receive $210 million in cash as part of the deal. Gentherm aims to maintain a strong balance sheet with leverage of about one turn upon closing. The combined company will have pro forma revenues of approximately $2.6 billion and an EBITDA margin around 13%.

Gentherm’s focus on growth and operational excellence aligns with Modine Performance Technologies’ strategic approach. The deal aims to maximize synergies and expand market reach, particularly in commercial vehicles, heavy-duty equipment, and power generation. The merger is seen as a significant step in driving profitable growth for both companies.

Read more at Yahoo Finance: Gentherm to Merge With Modine Performance Tech in Tax-Free Reverse Morris Trust, Targets $25M Synergies