Acquisition adds hyperscale and colocation
solution to Modine's data center technology portfolio and
brings highly complementary products and channels to the indoor air
quality business
RACINE,
Wis., Feb. 26, 2024 /PRNewswire/ --
Modine (NYSE: MOD), a diversified global leader in innovative
thermal management and ventilation solutions, announced today that
it had entered into a definitive agreement to acquire Scott
Springfield Manufacturing, a leading manufacturer of air handling
units (AHU). With this transaction, Modine will gain immediate
access to a highly complementary product portfolio and a blue-chip
customer base in several strategic end markets, including
hyperscale and colocation data centers, telecommunications,
healthcare and aerospace.
"We are excited to welcome the Scott Springfield team to the
Modine family and continue to advance our complete suite of
products in the data center area, as well as expand our indoor air
quality offerings," said Neil D.
Brinker, President and Chief Executive Officer of Modine.
"The acquisition is right in line with our transformation and will
bring Modine a product line and customer base in high-growth
markets that fully complement and expand our current reach,
including to hyperscale data center operators. Further, the
addition of custom air handling unit capabilities demonstrates our
continued commitment to focus on innovative, engineered solutions
that help us achieve our long-term growth targets. Coming on the
heels of our acquisition of Napps Technology last year and the
purchase of liquid immersion cooling assets last month, Modine is
in a very strong position to provide customers a full range of
technology solutions in critical cooling and ventilation
applications."
Based in Calgary, Canada, Scott
Springfield Manufacturing is known for premier design and
engineering expertise in the manufacture of AHUs for a broad range
of commercial and industrial applications. The company employs
approximately 500 people at two manufacturing facilities in
Calgary that serve different end
markets. The facility producing AHUs for blue-chip hyperscale and
colocation data center customers is equipped with automated
manufacturing equipment and is optimized for higher volume
production. The other facility manufactures custom-built AHUs
chiefly for the healthcare sector. Specially engineered AHUs are
imperative in meeting the stringent HVAC, indoor air quality and
energy efficiency requirements of hospitals, clean rooms and
laboratories. With the purchase, Modine will also gain a sales
representative network in the indoor air quality market covering
additional areas in the U.S. and Canada, creating cross-selling opportunities
for Modine's existing chiller portfolio.
"Technology solutions that address real-world concerns – such as
delivering healthy environments for people and stable environments
for the IT infrastructure that supports our digital lifestyles –
are more important than ever," said Eric
McGinnis, President, Climate Solutions. "Modine's data
center and IAQ businesses deliver these world-class HVAC solutions
to markets where efficient and effective thermal management and
ventilation are vital. The acquisition of Scott Springfield will
expand our portfolio and manufacturing footprint, enabling us to
meet a complete range of client needs in our targeted data center
and IAQ markets, positioning us as a one-stop shop for
mission-critical HVAC solutions."
Scott Springfield Manufacturing expects to report final revenue
for their fiscal 2023 of more than $100
million (USD). Total consideration for the transaction is
based on an enterprise value of approximately $190 million (USD) and is expected to close in
the first calendar quarter of 2024. The transaction will be
financed through a combination of cash and debt and consideration
will be paid in Canadian dollars. Management expects this
acquisition to be immediately accretive to earnings and anticipates
generating incremental growth and future cost savings through
deployment of Modine's 80/20 operating model. Barclays served as an
advisor to Modine for the transaction, and Angle Advisors served as
an advisor to Scott Springfield Manufacturing.
About Modine
At Modine, we are Engineering a Cleaner,
Healthier World™. Building on more than 100 years of excellence in
thermal management, we provide trusted systems and solutions that
improve air quality and conserve natural resources. More than
11,000 employees are at work in every corner of the globe,
delivering the solutions our customers need, where they need them.
Our Climate Solutions and Performance Technologies segments support
our purpose by improving air quality, reducing energy and water
consumption, lowering harmful emissions and enabling cleaner
running vehicles and environmentally-friendly refrigerants. Modine
is a global company headquartered in Racine, Wisconsin (U.S.), with operations in
North America, South America, Europe and Asia. For more information about Modine, visit
www.modine.com.
Investor Contact: Kathleen
Powers; kathleen.t.powers@modine.com; (262) 636-1687
Media Contact: pr@modine.com
Forward-Looking Statements
This press release
contains statements, including information about future financial
performance and market conditions, accompanied by phrases such as
"believes," "estimates," "expects," "plans," "anticipates,"
"intends," "projects," and other similar "forward-looking"
statements, as defined in the Private Securities Litigation Reform
Act of 1995. Modine's actual results, performance or achievements
may differ materially from those expressed or implied in these
statements because of certain risks and uncertainties, including,
but not limited to those described under "Risk Factors" in Item 1A
of Part I of the Company's Annual Report on Form 10-K for the year
ended March 31, 2023 and under
Forward-Looking Statements in Item 7 of Part II of that same report
and in the Company's Quarterly Report on Form 10-Q for the quarters
ended June 30, 2023, September 30, 2023, and December 31, 2023. Other risks and uncertainties
include, but are not limited to, the following: our ability to
complete the acquisition in a reasonable manner and timeframe, to
integrate the business successfully into Modine thereafter and to
harness the anticipated synergies associated with the acquisition;
the impact of potential adverse developments or disruptions in the
global economy and financial markets, including impacts related to
inflation, rising energy costs, along with supply chain challenges
or supplier constraints, tariffs, sanctions and other trade issues
or cross-border trade restrictions; the impact of other economic,
social and political conditions, changes and challenges in the
markets where we operate and compete, including foreign currency
exchange rate fluctuations, increases in interest rates or
tightening of the credit markets, recession, restrictions
associated with importing and exporting and foreign ownership,
public health crises, and the general uncertainties about the
impact of regulatory and/or policy changes, including those related
to tax and trade, the COVID-19 pandemic, the military conflict in
Ukraine and other matters, that
have been or may be implemented in the U.S. or abroad; the impact
of the COVID-19 pandemic on the national and global economy, our
business, suppliers, customers, and employees; the overall health
and pricing focus of our customers; our ability to successfully
execute our strategic and operational plans, including applying
80/20 principles to our business; our ability to effectively and
efficiently modify our cost structure in response to sales volume
increases or decreases and complete restructuring activities and
realize benefits thereon; our ability to fund our global liquidity
requirements efficiently and comply with the financial covenants in
our credit agreements; operational inefficiencies as a result of
program launches, unexpected volume increases or decreases, and
product transfers; the impact on Modine of any significant
increases in commodity prices, particularly aluminum, copper, steel
and stainless steel (nickel) and other purchased components and
related costs, and our ability to adjust product pricing in
response to any such increases; the nature of and Modine's
significant exposure to the vehicular industry and the dependence
of this industry on the health of the economy; our ability to
recruit and maintain talent in managerial, leadership, operational
and administrative functions and to mitigate increased labor costs;
our ability to protect our proprietary information and intellectual
property from theft or attack; the impact of any substantial
disruption or material breach of our information technology
systems; costs and other effects of environmental investigation,
remediation or litigation; and other risks and uncertainties
identified in our public filings with the U.S. Securities and
Exchange Commission. Forward-looking statements are as of the
date of this press release, and we do not assume any obligation to
update any forward-looking statements.
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SOURCE Modine