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Modine to acquire Luvata for $422m

Modine-logo-copyUSA: Modine Manufacturing, the US owner of Airedale, is to acquire coil company Luvata HTS in a $422m deal.

The deal, which will be financed through a combination of cash, debt, and $25m of Modine common stock, is expected to be completed this year.

The Cooling Post revealed rumours in January that Luvata had been put up for sale by its Jersey-based private-equity-owners Nordic Capital. The company was originally acquired by Nordic from Outokumpu in 2005. In 2015, Luvata HTS had net sales of roughly $530m and EBITDA of $59m.

“Luvata HTS is the largest independent producer of HVAC&R coils and coatings globally,” said Thomas A Burke, Modine’s president and CEO. “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. Most importantly, the addition of Luvata HTS helps to expand our margin profile and future growth opportunities.”

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.

“We examined several interesting acquisition opportunities as part of our strategic review process, but Luvata HTS was the most logical and compelling fit,” Burke added. “While the company already operates a fairly lean enterprise, we do expect to achieve annual cost synergies of roughly $15m within the first three to four years, in particular through the ongoing optimisation of manufacturing and procurement organisations and cost structures.

“We also believe revenue synergies will emerge as we look to sell Luvata HTS’ products into Modine’s broad client base, utilise Luvata HTS’ sales team to sell Modine’s coil and other products into Luvata HTS’ client base, and pursue other larger geographic and adjacent product line opportunities in the future.”

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