Benzinga | Nov 2, 2020 07:00AM EST

Modine Announces Sale Of Majority Of Its Automotive Business To Dana Incorporated

RACINE, Wis., Nov. 2, 2020 /PRNewswire/ -- Modine Manufacturing Company (NYSE:MOD, Company&quot, , ))))), a diversified global leader in thermal management technology and solutions, today announced that it has signed a definitive agreement with Dana Incorporated to sell the liquid-cooled portion of its automotive business, which represents approximately 70% of its Automotive business revenue.

The transaction announced today is an important milestone in Modine's previously announced plan to exit its Automotive business and confers the following benefits:

* Enhances the Company's focus on higher returning businesses where Modine has demonstrated an ability to successfully drive both organic and inorganic growth

* Allows the Company to avoid significant liabilities required to complete necessary restructuring and future cash investments

* Will result in a significant reduction to future capital spending needs, leading to higher cash flow

* Represents a leverage neutral transaction for the Company

The transaction is expected to close in the first half of 2021, following the receipt of regulatory approvals and other customary closing conditions. After deductions for customary debt-like items, standard post-closing adjustments and restructuring actions, the Company is not expecting significant net cash proceeds. In addition, Modine is actively pursuing a variety of alternatives to complete the exit of the remaining automotive business.

"We are pleased to announce the sale of our automotive business to Dana in a mutually beneficial strategic transaction," said Modine Interim Chief Executive Officer, Michael B. (Mick) Lucareli. "This transaction accelerates Modine's transformation to become a diversified industrial company with higher operating margins, lower capital intensity and greater free cash flow generation. The enhanced operating profile resulting from this transaction is a critical component of our strategic objectives and will allow us to provide additional capital and resources to accelerate the growth of our commercial HVAC and data center businesses. We are pleased to have completed this phase of the process and are excited to take the next steps in our strategic growth plan."

The Company will provide additional information on the conference call and webcast to discuss its second quarter financial results for the period ended September 30, 2020, on Friday, November 6, 2020 at 8:00 a.m. Central Time (9:00 a.m. Eastern Time).

J.P. Morgan Securities LLC acted as Modine's financial advisor and Latham & Watkins LLP acted as legal counsel.