RACINE, Wis., Nov. 30, 2016 /PRNewswire/ -- Modine
Manufacturing Company (NYSE: MOD), a diversified global leader in
thermal management technology and solutions, announced today the
completion of its previously disclosed agreement to purchase Luvata
Heat Transfer Solutions (HTS). The agreement to acquire the company
was announced on September 6, 2016.
The purchase price was approximately $418
million.
Luvata HTS is a leading manufacturer of commercial and
industrial coils, coolers and related products, primarily for the
HVAC&R markets. Luvata HTS's product offering covers a broad
range of heat exchanger coils, and commercial refrigeration and
industrial coolers, complemented by anti-corrosion coating
solutions. For the trailing 12 months ended September 30, 2016, Luvata HTS had net sales of
$549 million and EBITDA of
$55 million.
The company expects to achieve annual cost synergies of at least
$15 million within the first three to
four years, in particular through the ongoing optimization of
manufacturing and procurement organizations and cost
structures. Additional revenue synergies will emerge through
the sale of Luvata HTS's products into Modine's broad client base
and utilization of Luvata HTS's sales team to sell Modine's coil
and other products into Luvata HTS's client base.
"The acquisition of Luvata HTS addresses our Diversify and Grow
objectives very clearly and we have no doubt it will further
Strengthen Modine as well, as this now-nearly $2B company moves forward with a broad base of
earnings, reduced cyclicality and common focus," said Modine President and Chief Executive Officer,
Thomas A. Burke.
In light of the addition of the Luvata HTS business and the
near-term discontinuation of the Luvata name, Modine will be
transitioning to new names for each of its global businesses. These
new designations will more clearly define our three distinct, but
clearly related businesses. The new Modine names will be:
- Commercial and Industrial Solutions (CIS) (previously the
Luvata HTS and Modine Coils businesses);
- Vehicular Thermal Solutions (Modine's "vehicular" business);
and
- Building HVAC Systems (Modine's current BHVAC
business).
In support of the Commercial and Industrial Solutions (CIS)
integration process, Modine has announced that Dennis Appel, previously President, Luvata
HTS, will transfer to Modine in the role of Vice President,
Commercial and Industrial Solutions.
Burke continued, "Modine is now 10,500 employees strong with an
expanded footprint and increased product portfolio. The
combination of Modine and Luvata HTS provides a complete product
portfolio as well as agile manufacturing capabilities across the
globe, all of which will allow superior response to customer
needs. We will provide consolidated results and updated
guidance for fiscal 2017, including the effect of the Luvata HTS
transaction, in connection with our third quarter earnings
release."
About Modine
Modine, with fiscal 2016 revenues of $1.4
billion, specializes in thermal management systems and
components, bringing highly engineered heating and cooling
technology and solutions to diversified global markets. Modine
products are used in light, medium and heavy-duty vehicles,
heating, ventilation and air conditioning equipment, off-highway
and industrial equipment and refrigeration systems. Modine is
a global company headquartered in Racine,
Wisconsin (USA), with operations in North America, South
America, Europe,
Asia and Africa. For more
information about Modine, visit www.modine.com.
Forward-Looking Statements
This press release contains statements, including information
about future financial performance and market conditions,
accompanied by phrases such as "believes," "estimates," "expects,"
"plans," "anticipates," "intends," and other similar
"forward-looking" statements, as defined in the Private Securities
Litigation Reform Act of 1995. Modine's actual results, performance
or achievements may differ materially from those expressed or
implied in these statements because of certain risks and
uncertainties, including, but not limited to, those described under
"Risk Factors" in Item 1A of Part I of the Company's Annual Report
on Form 10-K for the year ended March 31,
2016 and under Forward-Looking Statements in Item 7 of Part
II of that same report and in the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30,
2016. Other risks and uncertainties include, but are not
limited to, the following: Modine's ability to integrate the Luvata
HTS business successfully into Modine, to harness the anticipated
synergies associated with the transaction, and to achieve projected
cash flows sufficient to enable Modine to maintain a desirable
leverage ratio; the overall health and price-down focus of Modine's
customers, particularly in light of economic and market-specific
challenges; the ability of the Company to successfully implement
its Strengthen, Diversify and Grow strategic transformation;
uncertainties regarding the costs and benefits of Modine's
restructuring activities in our Americas and Europe segments, including the activities
associated with the closure of Modine's facility in Washington, Iowa; operational inefficiencies as a result
of program launches, unexpected volume increases and product
transfers; economic, social and political conditions, changes and
challenges in the markets where Modine operates and competes,
including foreign currency exchange rate fluctuations (particularly
the value of the euro, Brazilian real and British pound relative to
the U.S. dollar), tariffs, inflation, changes in interest rates,
recession, restrictions associated with importing and exporting and
foreign ownership, and in particular the economic and market
conditions in Brazil and
China, the remaining economic
uncertainties in certain markets in North
America, and the continuing uncertainty regarding the recent
"Brexit" vote in Great Britain;
the impact on Modine of any significant increases in commodity
prices, particularly aluminum and copper, and our ability to pass
these prices on to customers; Modine's ability to successfully
execute its strategic and operational plans; the nature of and
Modine's significant exposure to the vehicular industry and the
dependence of this industry on the health of the economy; costs and
other effects of environmental investigation, remediation or
litigation; and other risks and uncertainties identified by the
Company in public filings with the U.S. Securities and Exchange
Commission. The Company does not assume any obligation to update
any forward-looking statements.
Contact: Kathleen T. Powers 262-636-1687
k.t.powers@na.modine.com
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SOURCE Modine Manufacturing Company