Dana to Buy Majority of Modine’s Auto Business

Driveline giant Dana has agreed to purchase Modine Manufacturing’s liquid-cooled thermal management automotive operations.

Under the terms of the deal, which is expected to close in the first half of 2021, Dana will pay Modine one dollar and assume unspecified financial liabilities.

What Dana Gets

Representing 70% of Modine’s automotive business, the acquisition—including eight manufacturing facilities in Europe, China and the U.S.—is expected to contribute $300 million in annual revenue and $30 million in EBITDA to Dana’s bottom line.

Dana says this will increase the scale of its power technologies business by about 30% and accelerate the company's electric vehicle strategy.

The deal is the latest in a series of acquisitions that Dana has made in recent years to bolster its electrification capabilities. It follows purchases of:

• Canada’s Nordresa Motors
• Oerlikon’s drive systems unit
• SME Group’s motors and inverter business
• A controlling stake in TM4, which produces motors and inverters

The Modine agreement, says CEO Jim Kamsickas, “is synergistic to our current portfolio, making it a natural fit for our Power Technologies business.”

The deal strengthens relationships with new and existing light-vehicle OEM customers in Europe and Asia. Dana also expects to expand its business with electric vehicle startup companies and other “new mobility” players.

With global sales of $8.6 billion last year, Dana supplies axles, driveshafts, transmissions and thermal management systems to passenger and commercial vehicles.

Industrial Focus

Racine, Wisc.-based Modine says the divestiture will speed its transformation to become a “diversified industrial company with higher operating margins, lower capital intensity and greater free cash flow generation."

The company supplies thermal management systems and components for automotive, HVAC, commercial vehicle, off-highway, power/industrial, data centers and refrigeration.

Modine aims to eventually divest its entire automotive business to focus on its core industrial markets. The supplier posted sales of $2 billion last year.