Modine to Spin Off and Merge Aftermarket Business with Transpro
Modine Manufacturing Company has signed a Letter of Intent with Transpro, Inc. to spin off Modine’s aftermarket business on a debt-free basis and merge it with Transpro.The transaction would create a new, publicly traded company with annual revenues of more than $400 million, selling replacement radiators, radiator cores, charge air coolers, heaters, condensers, and air conditioning components for automotive, truck, and industrial applications primarily in North America and Europe.The new company will focus on the aftermarket, offering product line breadth and depth, a strong distribution network, enhanced customer service offerings, broad technological and financial resources for future growth, and an improved credit profile, according to company officials.Concurrent with the aftermarket business spin-off and merger, Modine will acquire Transpro’s heavy-duty original equipment (OE) business, including a plant in Jackson, Miss., for $17 million in cash. The business, with annual sales of approximately $45 million, manufactures heat exchangers for the heavy-duty truck and industrial OE markets. The business would be a strong strategic fit with Modine’s remaining businesses (including Modine Korea) that have total annualized sales of approximately $1.4 billion and offers synergies and expansion opportunities over time. The transaction would be immediately accretive to the company’s earnings per share.Modine investors will retain shares in Modine Manufacturing Company and, as a result of this transaction, would also receive approximately 0.25 shares in the new company for every share of Modine stock held at the closing. Upon the closing of the merger, Modine shareholders would own 54 percent of the new company, while existing Transpro shareholders would hold the remaining 46 percent.