Gentherm Targets $3.5B Revenue as Modine Deal Expands Beyond Autos

Gentherm outlined plans to diversify beyond light-vehicle thermal comfort products, expand margins and complete its combination with Modine Performance Technologies, which management expects to close in early fourth quarter.

Speaking at a JPMorgan event, President and CEO Bill Presley described Gentherm as a $1.5 billion provider of thermal and precision flow-management technologies. The company’s core platforms include air-moving devices, pneumatic systems, valve systems and thermal technologies. Its current revenue mix is 97% automotive and 3% medical, but management said it is pursuing growth in medical, home and office furnishings, commercial vehicles, off-highway equipment and power generation.

Gentherm sells products such as heated and cooled seats, heated steering wheels, lumbar and massage systems, surgical warming blankets, warming pads and fluid-warming devices. Presley said the company supplies more than 50 automakers and holds about 50% of its core automotive market.

Management said the planned combination with Modine Performance Technologies represents a major step in shifting Gentherm’s end-market mix. Modine Performance Technologies produces heat exchangers used in commercial vehicles, off-highway equipment and power-generation applications.

Presley said the combined company would have approximately $2.6 billion in revenue on day one, EBITDA margins above 12%, and less than 70% exposure to light vehicles.

Gentherm has set a goal of reaching $3.5 billion in revenue and more than $500 million in EBITDA by 2030. The company expects the deal to create cross-selling opportunities, including an estimated $100 million of additional revenue by 2030. More than half of that opportunity is expected to come from Gentherm’s valve business, Presley said. The products can be used alongside Modine’s heat exchangers, while Modine’s operations could provide Gentherm access to new customers and markets. India was highlighted as one potential benefit. Presley said Modine has manufacturing capacity and commercial teams in the country, enabling Gentherm to pursue opportunities involving two-wheelers, cooling products, valves and fans.

Chief Financial Officer and Treasurer Jon Douyard said the transaction is structured as a Reverse Morris Trust. Gentherm announced the deal in January, has received regulatory approvals and has secured $800 million in committed financing, he said. The company plans to hold its shareholder vote on Sept. 10 and remains on track for an early-fourth-quarter closing, subject to remaining items including an Internal Revenue Service ruling.

Douyard said Gentherm delivered a strong first half, driven by production launches, broad-based revenue growth and operational improvements. China, North America and Europe all cont...