RACINE, Wis. - Modine (NYSE:MOD) Manufacturing Company (NYSE: MOD), known for its thermal management and ventilation solutions, has announced the definitive agreement to acquire Scott Springfield Manufacturing, a prominent air handling unit producer. This strategic move aims to enhance Modine's product line and market reach, particularly in the data center and indoor air quality sectors.
The acquisition enables Modine to integrate Scott Springfield's air handling units into its portfolio, catering to the needs of hyperscale and colocation data centers, telecommunications, healthcare, and aerospace industries. The addition is expected to complement Modine's existing offerings and provide access to new customer segments.
Scott Springfield, headquartered in Calgary, Canada, employs around 500 staff across two manufacturing facilities, each serving distinct markets. One facility focuses on high-volume production for data center clients, while the other specializes in custom air handling units for the healthcare sector.
Modine's President and CEO, Neil D. Brinker, expressed enthusiasm about the acquisition, stating it aligns with the company's transformation strategy and commitment to engineered solutions. He highlighted the potential for growth in high-demand markets and the synergy with Modine's recent acquisitions, including Napps Technology and liquid immersion cooling assets.
Eric McGinnis, President of Modine's Climate Solutions, emphasized the importance of technological solutions for healthy and stable environments, noting that the acquisition would position Modine as a comprehensive provider of mission-critical HVAC solutions.
Scott Springfield anticipates reporting over $100 million in revenue for fiscal 2023. The transaction, valued at approximately $190 million, is expected to close in the first quarter of 2024. It will be financed through cash and debt, with payment in Canadian dollars. Management anticipates the acquisition to be immediately accretive to Modine's earnings, with further growth and cost savings projected from the application of Modine's 80/20 operating model.
Barclays acted as an advisor to Modine, while Angle Advisors advised Scott Springfield on the transaction.
The information is based on a press release statement.
InvestingPro Insights
As Modine Manufacturing Company (NYSE: MOD) sets its sights on expanding its reach in the thermal management and ventilation industry, the market is responding positively to its strategic moves. With a market capitalization of $4.39 billion and a strong revenue growth of 7.46% over the last twelve months as of Q3 2024, Modine's financial health appears robust. This growth narrative is further reinforced by the company's impressive one-year price total return of 237.46%, signaling investor confidence in Modine's market trajectory.
An InvestingPro Tip highlights that analysts have revised their earnings upwards for the upcoming period, suggesting that Modine's acquisition of Scott Springfield Manufacturing could be a catalyst for financial performance. Additionally, the company's stock is trading near its 52-week high, at 98.5% of the peak, indicating that the market is optimistic about Modine's current valuation and future prospects.
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