Modine Manufacturing Company (NYSE: MOD) announced that it has signed a definitive agreement with Dana Incorporated to sell the liquid-cooled portion of its automotive business, which represents approximately 70% of its Automotive business revenue.
The transaction is an important milestone in Modine’s previously announced plan to exit its Automotive business.
The transaction is expected to close in the first half of 2021, following the receipt of regulatory approvals and other customary closing conditions. After deductions for customary debt-like items, standard post-closing adjustments and restructuring actions, the Company is not expecting significant net cash proceeds. In addition, Modine is actively pursuing a variety of alternatives to complete the exit of the remaining automotive business.
“We are pleased to announce the sale of our automotive business to Dana in a mutually beneficial strategic transaction,” said Modine Interim Chief Executive Officer, 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.”