Gentherm Inc

Gentherm and Modine Manufacturing Company announced additional details for the completion of their previously announced combination of Gentherm and Modine's Performance Technologies business, a Reverse Morris Trust transaction in which Modine will spin off the business held by Platinum SpinCo Inc. and then merge SpinCo into a Gentherm subsidiary. Modine's board set the close of business on September 28, 2026, as the record date for the SpinCo distribution, which is expected to occur on October 1, 2026, with the Merger to be completed immediately afterward the same day. Gentherm's board declared a special cash dividend estimated at an aggregate of $58,350,533, or an estimated $1.90 per share, payable October 7, 2026, to Gentherm shareholders of record as of September 28, 2026, conditioned on the closing of the Merger; Modine shareholders receiving Gentherm shares in the Merger will not be entitled to that dividend. Because trading since the merger agreement reduced overlapping ownership, the parties expect the exchange ratio to be increased, leading Gentherm to issue approximately 2,902,466 additional shares in the Merger, and to offset that value the cash distribution paid by SpinCo to Modine before the Merger will be reduced from $210 million to $159 million. Based on the expected exchange ratio and 31,230,226 fully diluted Gentherm shares as of September 16, 2026, Gentherm shareholders immediately prior to closing are expected to own approximately 56.4% of the combined company and former SpinCo holders approximately 43.6%, excluding overlapping ownership. Modine received a favorable Private Letter Ruling from the Internal Revenue Service, and Gentherm shareholders approved the share issuance and an authorized-share increase at a special meeting on September 10, 2026; closing remains subject to conditions including consummation of the SpinCo financing, continued validity of the Private Letter Ruling, Modine's receipt of a solvency opinion and Nasdaq listing approval.

Gentherm shareholders voted on September 10 to approve the combination of Modine's Performance Technologies business with Gentherm, clearing the last major hurdle before the two businesses become one. Roughly 99% of votes cast backed the share issuance needed to fund the deal, and about 94% of outstanding shares approved the charter amendment authorizing those new shares. Both companies have already cleared every required regulatory approval, including a private letter ruling from the Internal Revenue Service confirming the tax treatment of the share exchange, and the transaction is on track to close October 1, with the final exchange ratio set at closing under a mechanism built to preserve the deal's tax-free structure for Modine and its shareholders. The timing works in Gentherm's favor: second-quarter product revenue reached $416.2 million, reported on July 23, up 11.0% from $375.1 million a year earlier, and the company raised its full-year guidance on revenue, adjusted EBITDA, and adjusted free cash flow. That guidance explicitly excludes any impact from the Modine deal, so the final exchange ratio and the real financial effect of folding in the Performance Technologies business remain open questions even after the shareholder vote.

Gentherm raised its full-year 2026 guidance following a record second quarter with product revenue of $416 million, up 11% year-over-year. The company now expects full-year revenue of $1.6 billion, adjusted EBITDA between $185 million and $200 million, and adjusted free cash flow of $85 million to $100 million. Automotive Climate and Comfort Solutions revenue grew 14.1%, driven by strong outperformance across all regions and product categories, including a 38% increase in Lumbar and Massage Comfort Solutions. Gentherm also announced a new $400 million stock repurchase authorization and provided updates on its pending combination with Modine Performance Technologies, which is expected to close early in the fourth quarter.

Gentherm surged about 20.3% on Thursday after reporting second-quarter results that beat analyst expectations and raising its full-year guidance. The thermal management company posted adjusted earnings per share of $0.75, topping the consensus estimate of $0.64, while revenue came in at $416.2 million, up 11% year over year and ahead of the $392.15 million estimate, marking a record quarter driven by growth in its automotive segment. Net income rose to $4.4 million from $0.5 million a year earlier, though operating income declined to $10.7 million from $24 million and gross margin slipped to 23.2% from 23.9%. Gentherm raised its 2026 outlook, now expecting revenue at a midpoint of about $1.6 billion and adjusted EBITDA at a midpoint of around $192.5 million, and also announced a new $400 million share repurchase program.