MODINE MANUFACTURING (MOD)

• Modine and Gentherm have entered into a definitive agreement for Modine to spin-off and combine its Performance Technologies business with Gentherm in a Reverse Morris Trust transaction valued at ~$1.0 billion.
• Modine shareholders are expected to own approximately 40% of the combined company, and the transaction is intended to be tax-free for Modine and its shareholders for U.S. federal income tax purposes.
• Modine will receive a $210 million cash distribution from SpinCo and will retain its Climate Solutions businesses, which generated $1.6 billion in revenue and $307 million in adjusted EBITDA for the twelve months ended September 30, 2025.
• The combined company (Gentherm and Modine Performance Technologies) had pro forma revenue of $2.6 billion and expects to generate approximately $25 million in identified annual cost synergies.
• The transaction is expected to close in the fourth quarter of calendar year 2026.

• Modine announced a tax-free spin-off of its Performance Technologies (PT) business, which will simultaneously combine with Gentherm, valuing the PT business at approximately $1 billion.
• Modine will receive $210 million in cash, and its shareholders will obtain approximately $790 million of Gentherm stock, leading to 40% ownership of the combined company for Modine shareholders.
• The remaining Modine will transform into a pure-play climate solutions company, focusing on high-growth, high-margin opportunities, especially in the data center cooling market.
• The climate solutions segment generated $1.6 billion in revenue for the 12 months ending September 30, 2025, with expected growth of 35%-40% to nearly $2 billion this fiscal year. The data center business is projected to grow 50%-70% annually over the next two years, aiming to replace the $1 billion PT revenue within 12-24 months.
• The transaction is anticipated to close in the fourth quarter of calendar year 2026.

• Modine Manufacturing Company announced a joint agreement to spin off its Performance Technologies (PT) business and combine it with Gentherm, structured as a tax-free Reverse Morris Trust for Modine and its shareholders.
• The transaction values the Performance Technologies business at approximately $1 billion. Modine will receive $210 million in cash, and its shareholders will receive approximately $790 million of Gentherm stock, resulting in 40% ownership of the combined company.
• The remaining Modine will become a pure-play climate solutions company, focusing on high-growth, high-margin opportunities, particularly in the data center cooling market.
• The climate solutions segment generated $1.6 billion in revenue and $307 million in adjusted EBITDA (19.6% margin) for the trailing twelve months ending September 30, 2025. Revenue is expected to grow 35%-40% to nearly $2 billion this fiscal year.
• The data center business, which has grown at a 93% CAGR over the last two years, is anticipated to achieve 50%-70% annual growth over the next two years, with a target to exceed $2 billion in revenue by fiscal 2028 from this market alone. The transaction is expected to close in the fourth quarter of calendar year 2026.

• Modine announced a transaction to spin off its Performance Technologies segment and combine it with Gentherm in a Reverse Morris Trust structure, which is intended to be tax-free for Modine and its shareholders.
• The transaction values the Performance Technologies business at approximately $1 billion.
• Modine will receive a $210 million cash distribution, and Modine shareholders will receive approximately $790 million in Gentherm stock, leading to 40% ownership in the combined company post-closing.
• The deal is expected to close in the fourth quarter of calendar year 2026, subject to various approvals and conditions.
• Following the transaction, the remaining Modine will operate as a pure-play climate solutions company, focusing on high-growth and high-margin opportunities.

• Modine Manufacturing Company announced a tax-free spinoff of its Performance Technologies (PT) segment, which will then be combined with Gentherm in a Reverse Morris Trust transaction.
• The transaction values the PT business at approximately $1 billion, or 6.8 times its trailing twelve-month Adjusted EBITDA as of September 30, 2025, and is expected to close in the fourth quarter of calendar year 2026.
• Modine will receive $210 million in cash, and its shareholders will receive approximately $790 million of Gentherm stock, resulting in 40% ownership of the combined company for Modine shareholders.
• The remaining Modine will become a pure-play Climate Solutions company, with the segment generating $1.6 billion in revenue over the 12 months ending September 30, 2025, and expected revenue growth of 35%-40% to nearly $2 billion for the current fiscal year.

• Modine (NYSE: MOD) has officially opened a new 155,000-square-foot manufacturing facility in Franklin, Wisconsin, significantly expanding its data center cooling capacity.
• This facility is a key component of Modine's multi-year $100 million investment aimed at scaling production of Airedale by Modine™ data center cooling solutions.
• The new Franklin facility is projected to create over 300 new jobs by March 2026, with approximately 430 employees expected within three years.
• The $100 million investment also includes a new manufacturing facility in Grand Prairie, Texas, and expansions in Grenada, MS, and Jefferson City, MO, to further support data center growth.

Modine's Climate Solutions segment demonstrated strong performance in Q2 2026, with revenue growth and data center sales growth as detailed in the table below. This growth was partially driven by contributions from three recent acquisitions.

The company is significantly expanding its U.S. manufacturing capacity for data center products, including launching chiller production in Grenada, Mississippi, and planning initial production in Franklin, Wisconsin, and Jefferson City, Missouri, in Q4 2026. A new facility in Grand Prairie, Texas, is expected to be fully online early next fiscal year.

Investments in data center capacity expansion, including hiring 1,200 employees, led to a temporary decline in Climate Solutions adjusted EBITDA in Q2 2026, as shown in the table. Margins are anticipated to improve in Q4 2026 as new production lines ramp up.

Modine has raised its total company sales outlook for fiscal year 2026 and expects significant data center sales growth, with a long-term revenue target for data centers by fiscal 2028, as presented in the table.

• Modine's Climate Solutions segment reported a 24% increase in revenue for Q2 2026, with data center sales growing 42%. The company is significantly expanding its U.S. manufacturing capacity for data center products in Grenada, Mississippi; Franklin, Wisconsin; Jefferson City, Missouri; and Grand Prairie, Texas, with international expansions in Chennai, India, and the U.K. also underway or planned.
• For fiscal year 2026, Modine raised its total company sales outlook to grow 15%-20%, with Climate Solutions sales expected to increase 35%-40% and data center sales projected to grow in excess of 60%. The adjusted EBITDA outlook for FY 2026 remains $440 million-$470 million.
• The significant investments in data center capacity, including hiring 1,200 employees, led to temporary margin erosion in Climate Solutions in Q2 2026, which is expected to continue in Q3. However, margins are anticipated to improve in Q4 as new production lines ramp up and volumes increase.
• Modine is on track to achieve over $2 billion in data center revenues by fiscal 2028, aiming for a 15%-20% market share in the addressable HVAC market for data centers at that revenue level.

• Modine's Climate Solutions segment saw revenue increase by 24% in Q2 2026, with data center sales growing 42%. This growth was partially offset by lower profit margins in the segment due to significant investments in data center capacity expansion and the hiring of 1,200 employees.
• The company is significantly expanding its data center manufacturing capacity, launching new chiller production lines in Grenada, Mississippi, Franklin, Wisconsin, and Jefferson City, Missouri, and securing a new facility in Grand Prairie, Texas, for early next fiscal year. International expansion includes new production in Chennai, India, and planned chiller capacity in the UK.
• Modine raised its fiscal year 2026 total company sales outlook to grow 15% to 20%, with Climate Solutions sales expected to increase 35% to 40%, and data center sales projected to grow over 60%. The adjusted EBITDA outlook for FY2026 remains between $440 million and $470 million.
• Management expects Climate Solutions' margins to improve sequentially in Q3 2026 and return to more normalized levels in Q4 2026 as new production lines achieve significant volumes. The company aims for over $2 billion in data center revenues by fiscal 2028.

• Modine reported strong Q2 FY26 financial results, with net sales increasing to $738.9 million from $658.0 million in Q2 FY25, and adjusted EPS rising to $1.06 from $0.97.
• The Climate Solutions segment was a key growth driver, with revenue increasing 24% to $454.4 million, including 15% organic growth and a 42% increase in Data Centers. This growth was partially offset by a temporary margin impact due to substantial investments in data center capacity expansion.
• Despite a 4% decline in Performance Technologies revenues to $286.3 million, the segment's adjusted EBITDA margin improved by 90 basis points to 14.7% due to cost containment and operational efficiencies.
• Modine raised its fiscal year 2026 net sales outlook to +15% to +20% ($2.97 billion to $3.10 billion) and reaffirmed its adjusted EBITDA outlook of $440 million to $470 million. The company expects data center sales to grow over 60% this year.