Modine to Buy Luvata

Luvata HTS is a leading manufacturer of commercial and industrial coils, coolers and related products, primarily for the HVAC&R markets.

Modine Manufacturing Company — a diversified global leader in thermal management technology and solutions — announced on September 7 that it has entered into a definitive agreement to acquire Luvata Heat Transfer Solutions (HTS) for a total consideration of approximately $422 million, to be financed through a combination of cash, debt, and $25 million of Modine common stock.

Modine expects the transaction to close within calendar year 2016, subject to customary closing conditions, including regulatory review.

"We are excited to announce that we have taken the next step in our transformational Strengthen, Diversify and Grow corporate strategy through the upcoming addition of Luvata HTS," said Modine President and Chief Executive Officer, Thomas A. Burke. "Luvata HTS is the largest independent producer of HVAC&R coils and coatings globally. They bring an innovative culture and broad product offering that are highly complementary to Modine. Further, they bring a global footprint with manufacturing facilities spread over three continents, all of which are supported by best in class sales, engineering and support teams. Most importantly, the addition of Luvata HTS helps to expand our margin profile and future growth opportunities. We look forward to welcoming the Luvata HTS team to our family."

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, commercial refrigeration and industrial coolers, complemented by anti-corrosion coating solutions. In addition, Luvata HTS is a significant player in the power generation and transformer cooler markets due to strong relationships with European OEMs. Luvata HTS has a highly diversified customer base with strong and long-standing relationships. With agile manufacturing capabilities in North America, Europe, and Asia, the company has a proven ability to attract and serve a wide range of customers across several industrial markets. In 2015, Luvata HTS had net sales of roughly $530 million and EBITDA of $59 million

Dennis Appel, Luvata HTS President added, "Luvata and its owners are proud to have taken this important step toward combining the HTS Division with Modine, another proven industry leader and a true innovator in our industry. With Modine we are well positioned to continue our growth and be a part of a company that shares our passion for innovation and commitment to integrity. I am confident that together, we will provide even stronger service and solutions for our customers around the globe."

Burke concluded, "We examined several interesting acquisition opportunities as part of our strategic review process, but Luvata HTS was the most logical and compelling fit. While the company already operates a fairly lean enterprise, we do expect to achieve annual cost synergies of roughly $15 million within the first three to four years, in particular through the ongoing optimization of manufacturing and procurement organizations and cost structures. We also believe revenue synergies will emerge as we look to sell Luvata HTS's products into Modine's broad client base, utilize Luvata HTS's sales team to sell Modine's coil and other products into Luvata HTS's client base, and pursue other larger geographic and adjacent product line opportunities in the future."

J.P. Morgan Securities LLC serves as Modine's exclusive financial advisor and Kirkland & Ellis serves as Modine's primary legal advisor.

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