Dana Modine

Dana to acquire most of Modine Mfg.’s automotive business

Nov. 3, 2020
The transaction is designed to further strengthen Dana’s Power Technologies business unit, while also marking “an important milestone” in Modine's previously announced plan to exit the automotive segment

Dana Inc. has signed a definitive agreement to purchase the liquid-cooled portion of Modine Manufacturing Co.’s automotive business, the companies reported Nov. 2. The transaction is designed to further strengthen Dana’s Power Technologies business unit, while also marking “an important milestone” in Modine's previously announced plan to exit the automotive segment.

The agreed purchase price is $1 with the assumption of certain financial liabilities. Subject to customary regulatory approvals and other closing conditions, the transaction is expected to be completed in the first half of 2021 and will be consolidated within Dana’s Power Technologies segment.

The acquisition balances Dana’s current product portfolio by extending its offerings in chillers and water-charged air coolers, adding exhaust-gas recirculation, and expanding its manufacturing process capabilities, according to Dana.

The transaction brings numerous benefits to Dana, including:

  • adding approximately $300 million in revenue based on 2019 results, and is expected to contribute $30 million in adjusted EBITDA on a post-synergy basis
  • increasing the scale of Dana’s Power Technologies business by approximately 30 percent, balancing the product portfolio with expanded thermal content, and leveraging complementary manufacturing processes and supply chains
  • accelerating the company’s electrification strategy with electric-vehicle thermal technologies, a key source of market growth
  • strengthening relationships with new and existing light-vehicle manufacturers; and
  • diversifying the global geographic footprint of Dana’s Power Technologies operations in the United States, Europe, and Asia.

“Dana’s in-house engineering and manufacturing of thermal-management technologies is an important differentiator, and this acquisition is synergistic to our current portfolio, making it a natural fit for our Power Technologies business,” said James Kamsickas, Dana chairman and CEO. “In addition to strengthening relationships with core customers in Europe and Asia, it presents opportunities to leverage our scale to expand business with new mobility manufacturers and optimize the business to deliver significant value to our shareholders.”

For Modine, the deal:

  • enhances the company's focus on higher returning businesses where Modine has demonstrated an ability to successfully drive both organic and inorganic growth
  • allows the company to avoid significant liabilities required to complete necessary restructuring and future cash investments
  • will result in a significant reduction to future capital spending needs, leading to higher cash flow; and
  • represents a leverage neutral transaction for the company.

"We are pleased to announce the sale of our automotive business to Dana in a mutually beneficial strategic transaction," said Modine Interim CEO Michael B. (Mick) Lucareli. "This transaction accelerates Modine's transformation to become a diversified industrial company with higher operating margins, lower capital intensity and greater free cash flow generation. The enhanced operating profile resulting from this transaction is a critical component of our strategic objectives and will allow us to provide additional capital and resources to accelerate the growth of our commercial HVAC and data center businesses. We are pleased to have completed this phase of the process and are excited to take the next steps in our strategic growth plan."

This acquisition includes eight major facilities with operations in China, Germany, Hungary, Italy, the Netherlands, and the United States. The business serves a global roster of original-equipment and new mobility vehicle manufacturers.