Modine Manufacturing (MOD) Completes Luvata Heat Transfer Solutions Acquisition
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Modine Manufacturing Company (NYSE: MOD) announced 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."
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