8-K
Modine Manufacturing Co (MOD)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 25, 2021
| Modine Manufacturing Company | ||
|---|---|---|
| (Exact name of registrant as specified in its charter) | ||
| Wisconsin | 001-01373 | 39-0482000 |
| --- | --- | --- |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
| 1500 DeKoven Avenue, Racine, Wisconsin | 53403 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) | |
| Registrant's telephone number, including area code: | (262) 636-1200 | |
| --- | --- | |
| (Former name or former address, if changed since last report.) | N/A |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.625 par value | MOD | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230 .40 5 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Information to be Included in the Report
| Item 1.02 | Termination of a Material Definitive Agreement |
|---|
On October 25, 2021, the Securities and Asset Purchase Agreement dated November 2, 2020 (the “Purchase Agreement”) by and between Modine Manufacturing Company (the “Company”) and Dana Incorporated, a Delaware Corporation (“Buyer”), pursuant to which the Company agreed to sell the liquid-cooled portion and air-cooled electric vehicle portion of its automotive business (the “Business”) to Buyer, was terminated by mutual agreement of the parties thereto. The parties had been actively engaged in the regulatory review process in Germany in connection with the transactions contemplated under the Purchase Agreement, and mutually determined that it is no longer in the best interests of either party to pursue such transactions.
Subject to the terms and conditions of the Purchase Agreement, Buyer had agreed to purchase (i) all of the outstanding equity interests of certain subsidiaries of the Company that hold the Business and (ii) certain intellectual property used for the Business. The completion of the transaction was subject to customary closing conditions, including, among others, the receipt of approvals under or expiration or termination of applicable waiting periods under applicable competition and foreign investment laws. The Purchase Agreement included customary termination provisions in favor of the Company, on the one hand, and Buyer, on the other hand, including if the closing of the Transaction did not occur on or before the extended termination date of November 2, 2021. Neither the Company nor Buyer owes a fee to the other in connection with the termination.
A copy of the Purchase Agreement is attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K dated November 2, 2020, which is incorporated herein by reference. In connection with the termination of the Purchase Agreement, the Company and Buyer entered into that certain Termination Agreement dated as of October 25, 2021 (the “Termination Agreement”). A copy of the Termination Agreement is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure |
|---|
On October 25, 2021, the Company issued a press release announcing the termination of the Purchase Agreement. A copy of this press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits |
|---|---|
| (d) | Exhibits |
| --- | --- |
The following exhibit is being furnished herewith:
| 2.1 | Termination Agreement by and between the Company and Buyer, dated as of October 25, 2021 |
|---|---|
| 99.1 | Press Release issued by the Company on October 25, 2021 |
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Modine Manufacturing Company | ||
|---|---|---|
| By: | /s/ Sylvia A. Stein | |
| Sylvia A. Stein | ||
| Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer | ||
| Date: October 25, 2021 |
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Exhibit 2.1
TERMINATION AGREEMENT
This Termination Agreement (this “Termination Agreement”) is made and entered into as of October 25, 2021, by and between Modine Manufacturing Company, a Wisconsin corporation (“Seller Parent”), and Dana Incorporated, a Delaware corporation (“Buyer Parent”).
Recitals
Whereas, Seller Parent and Buyer Parent entered into that certain Securities and Asset Purchase Agreement, dated as of November 2, 2020 (the “Purchase Agreement”); and
Whereas, Seller Parent and Buyer Parent wish to terminate the Purchase Agreement.
Now, Therefore, for good and valuable consideration, the receipt and sufficiency of which is acknowledged and agreed, the parties hereby agree as follows:
1. Termination of the Purchase Agreement. Seller Parent and Buyer Parent hereby agree that, effective as of the date hereof and in accordance with Section 10.01(a) of the Purchase Agreement, the Purchase Agreement is terminated and shall be of no further legal force or effect, except as provided in Section 10.02 of the Purchase Agreement.
2. Miscellaneous.
(a) Amendment. This Termination Agreement may be amended or modified, in whole or in part, only by a duly authorized agreement in writing executed by each party hereto in the same manner (but not necessarily by the same individuals) as this Termination Agreement and which makes reference to this Termination Agreement.
(b) Governing Law. This Termination Agreement, and all issues and questions concerning the construction, validity, interpretation and enforceability of this Termination Agreement, and all claims and disputes arising hereunder or in connection herewith, whether purporting to sound in contract or tort, or at law or in equity, shall be governed by, and construed in accordance with, the laws of the State of Delaware, including its statutes of limitation, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
(c) Counterparts. This Termination Agreement may be executed in two or more counterparts and by DocuSign, PDF, facsimile or other electronically transmitted signatures, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the parties have hereunto caused this Termination Agreement to be duly executed as of the date first above written.
| MODINE MANUFACTURING COMPANY | |
|---|---|
| By: | /s/ Michael B. Lucareli |
| Name: | Michael B. Lucareli |
| Title: | Executive Vice President, CFO |
| DANA INCORPORATED | |
| By: | /s/ Timothy R. Kraus |
| Name: | Timothy R. Kraus |
| Title: | Senior Vice President, Treasurer |
[Signature Page to Termination Agreement]
Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
Modine Announces Termination of Securities and Asset Purchase Agreement for Liquid-Cooled Automotive Business
Company is now free to apply 80/20 principles to optimize margin profile
Racine, WI – October 25, 2021 – Modine Manufacturing Company (NYSE: MOD or the “Company”), a diversified global leader in thermal management technology and solutions, today announced that the Company has reached a mutual agreement with Dana Incorporated to terminate the Securities and Asset Purchase Agreement for the liquid-cooled portion of the Company’s Automotive business. Both companies had been actively engaged in the regulatory review process in Germany for many months and have decided that it is no longer in the best interest of either party to pursue the transaction further.
“Our team has worked diligently to divest this portion of our automotive business and we could not reach an agreement that would receive the necessary regulatory approval,” said Neil D. Brinker, President and CEO. “During these past several months, we planned for this possibility and developed a robust plan. We are ready to make significant changes to this business, particularly in response to the lower production volumes resulting from the global semiconductor shortage. During the period that the business was held for sale, we were prohibited from taking actions to substantially change the business. Now that we have terminated the agreement, we can apply an 80/20 lens to this business and make the changes necessary to significantly reduce costs and improve operating margins. This includes focusing resources on the products where we have a sustainable competitive position and that support our profitability targets. We expect this new approach to be more financially beneficial to Modine and drive long-term value for our shareholders.”
The Company plans to initiate measures to reduce costs and capital expenditures in areas where the Company does not have a competitive position. The ultimate goal is to optimize profit margins and cash flows while providing a more value-added focus to key customers.
Brinker concluded, “Over the past year, we have made important steps toward creating a stronger Modine. We are organizing our business to accelerate growth and have named experienced leaders for our business units. Our 80/20 initiative is driving important decisions and is beginning to yield tangible improvements across the business. Today’s announcement is consistent with this overall strategy and we believe that it will help to accelerate Modine’s transformation. Our vehicular strategy is just one element of our transformation story. We are also providing additional resources to grow other businesses that have strong market drivers, including electric vehicles, data centers, heating, indoor air quality and coatings. Collectively these initiatives will help Modine to become a higher margin, higher growth and less capital intensive business. We are excited about the prospects of furthering each of these core tenets and driving long-term value for all of our stakeholders.”
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About Modine
Modine, with fiscal 2021 revenues of $1.8 billion, specializes in thermal management systems and components, bringing highly engineered heating and cooling components, original equipment products, and systems to diversified global markets through its four complementary segments: BHVAC, CIS, HDE, and Automotive. Modine is a global company headquartered in Racine, Wisconsin (USA), with operations in North America, South America, Europe and Asia. For more information about Modine, visit www.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,” 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, 2021 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 quarter ended June 30, 2021. Other risks and uncertainties include, but are not limited to, the following: the impact of the COVID-19 pandemic on the national and global economy, our business, suppliers, customers, and employees; the overall health and price-down focus of Modine’s customers; our ability to successfully execute our strategic and operational plans; 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 comply with the financial covenants in our credit agreements and to fund our global liquidity requirements efficiently; operational inefficiencies as a result of program launches, unexpected volume increases, product transfers, and delays or inefficiencies resulting from restrictions imposed in response to the COVID-19 pandemic; economic, social and political conditions, changes and challenges in the markets where Modine operates and competes, including foreign currency exchange rate fluctuations, tariffs (and potential trade war impacts resulting from tariffs or retaliatory actions), inflation, changes in interest rates or tightening of the credit markets, recession, restrictions associated with importing and exporting and foreign ownership, public health crises, supplier constraints and the general uncertainties about the impact of regulatory and/or policy changes, including those related to tax and trade, the COVID-19 pandemic and other matters, that have been or may be implemented in the U.S. or abroad, and continuing uncertainty regarding the impacts of “Brexit”; 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; Modine’s ability to recruit and maintain talent in managerial, leadership, operational and administrative functions; Modine’s ability to protect its 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 by the Company in public filings with the U.S. Securities and Exchange Commission. Forward-looking statements are as of the date of this release, and the Company does not assume any obligation to update any forward-looking statements.
SOURCE: Modine Manufacturing Company
Investor & Media Contact
Kathleen Powers
(262) 636-1687
kathleen.t.powers@modine.com
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