Gentherm Adding Modine’s Thermal Management Group in $1B Deal
Gentherm Inc. is set to grow by more than 70% thanks to a planned deal to combine with Modine Performance Technologies that’s worth about $1 billion.
Bill Presley, CEO of Michigan-based Gentherm, said the proposed transaction with Modine—which will retain its climate solutions business that’s increasingly focused on data centers—is “a building block that expands Gentherm’s portfolio with highly complementary thermal management products and engineering capabilities” and pushes it more quickly beyond its light-vehicle and medical end markets into power generation, commercial-vehicle and heavy-duty equipment. Cross-selling will be key to building on the union, Presley told analysts on Jan. 29.
“They have the right channels to cross-sell the products into the markets we’re interested in. Specifically in agriculture and mining equipment, that’s a direct OEM model,” Presley said. “On the commercial vehicle, it’s more on the fleet side. We’ve been working to develop that organically, but [Modine has] very strong channels already established for cross-selling climate and comfort solutions into those markets.”
Joining up with Modine Performance Technologies will grow Gentherm’s revenue base to about $2.6 billion and its employee base to about 19,000. Presley and Modine Performance Technologies President Jeremy Patten plan to squeeze about $25 million in costs and synergies out of the combined organization by 2028 as they look to add a percentage point to the combined organization’s adjusted EBITDA margin to 13%.
More M&A on the Way for AIT
Staying in the mergers-and-acquisitions arena: The leaders of distribution giant Applied Industrial Technologies Inc. in mid-January paid $9 million for Thompson Industrial Supply, a Southern California company that they expect will add $20 million annually to AIT’s sales.
President and CEO Neil Schrimsher told analysts and investors that the Thompson deal is a good example of the kind of transaction his team is pursuing. But more significantly, he said his team is still on the hunt and likely to get busier soon.
“We continue to evaluate various M&A opportunities across both our segments that could drive a more active pace of acquisitions over the next 12 to 18 months,” Schrimsher said. “Our acquisition priorities remain unchanged with an ongoing focus on expanding our technical engineered solutions position across automation, fluid power and flow control.”
More M&A could be significant for AIT: The company’s second-quarter sales of nearly $1.2 billion (the company runs on a June fiscal year) already got a 6% lift from acquisitions.
Operations and Purchasing Veteran to Lead Ford Energy
A two-decade Ford Motor Co. veteran has been tapped to lead the company the company’s new venture into battery storage systems.
Lisa Drake comes to her role as president of Ford Energy—the creation of which was announced last month alongside the auto giant’s step back from electric-vehicle development—after most recently working as vice president of technology platform programs and EV systems. Before that, she was among other things COO of Ford’s North America operations and VP of global purchasing.
“Lisa has deep expertise in scaling complex industrial systems and securing critical supply chains,” John Lawler, Ford’s vice chair, said in a statement. “Her leadership is essential as we stand up Ford Energy to capture the growing demand for reliable battery energy storage that supports grid stability and resilience for utilities and large energy users.”
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has been in business journalism since the mid-1990s and writes about public companies, markets and economic trends for Endeavor Business Media publications, focusing on IndustryWeek, FleetOwner, Oil & Gas Journal, T&D World and Healthcare Innovation. He also curates the twice-monthly Market Moves Strategy newsletter that showcases Endeavor stories on strategy, leadership and investment and contributes to other Market Moves newsletters.
With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati in 1997, initially covering retail and the courts before shifting to banking, insurance and investing. He later was managing editor and editor of the Nashville Business Journal before being named editor of the Nashville Post in early 2008. He led a team that helped grow the Post's online traffic more than fivefold before joining Endeavor in September 2021.