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Acquisitions and Dispositions

9 Months Ended

Dec. 31, 2024

Acquisitions and Dispositions

Acquisitions and Dispositions

Note 2: Acquisitions and Dispositions

Acquisition of Scott Springfield Mfg. Inc.

On March 1, 2024, the Company acquired all of the issued and outstanding shares in the capital of Scott Springfield Mfg. Inc. (“Scott Springfield Manufacturing”) for consideration totaling $184.1 million. In July 2024 and upon finalization of the working capital adjustment, the Company paid $2.4 million to the seller.

Based in Calgary, Canada, Scott Springfield Manufacturing is a leading manufacturer of air handling units to customers in the data center, telecommunications, healthcare, and aerospace markets. This acquisition expanded the Company’s product offerings and customer base in the high-growth data center and indoor air quality markets in the U.S. and Canada. Since the date of the acquisition, the Company has reported the financial results of the Scott Springfield Manufacturing business within the Climate Solutions segment. For the three and nine months ended December 31, 2024, the Company included $73.6 million and $166.7 million of net sales, respectively, within its consolidated statements of operations attributable to Scott Springfield Manufacturing.

The Company has completed the purchase price allocation for its acquisition of Scott Springfield Manufacturing. During the first quarter of fiscal 2025, the Company completed its market and trade name analyses and recorded a measurement period adjustment to reduce the fair value of the trade name intangible asset by $9.6 million. This adjustment resulted in a corresponding decrease in the deferred income tax liability of $2.2 million and an increase in goodwill of $7.4 million.

The Company’s purchase price allocation for its acquisition of Scott Springfield Manufacturing is as follows:


Cash and cash equivalents		$	0.3
Trade accounts receivable			27.5
Inventories			20.9
Property, plant and equipment			6.0
Intangible assets			92.7
Goodwill			72.6
Other assets			4.0
Accounts payable			(8.6)
Accrued compensation and employee benefits			(1.3)
Deferred income taxes			(22.2)
Other liabilities			(7.8)
Purchase price		$	184.1

The following unaudited supplemental pro forma information presents the Company’s consolidated results of operations as though the acquisition of Scott Springfield Manufacturing had occurred at the beginning of fiscal 2023. This pro forma financial information is presented for illustrative purposes only and is not considered to be indicative of the operating results that would have been achieved had the acquisition been completed as of the date indicated or the operating results that may be obtained in the future.


		Three months ended			Nine months ended
		December 31, 2023			December 31, 2023
Net sales		$	582.0		$	1,881.2
Net earnings attributable to Modine			43.4			134.5

The supplemental pro forma financial information above is based upon the Company’s historical results and the historical results of Scott Springfield Manufacturing, which have been translated from Canadian dollars to U.S. dollars using the historical average foreign exchange rates. The pro forma information includes adjustments for: i) amortization and depreciation expense totaling approximately $2.0 million and $7.0 million for the three and nine months ended December 31, 2023, respectively, for acquired tangible and intangible assets, (ii) estimated quarterly interest expense of $1.5 million resulting from acquisition-related borrowings, and (iii) the estimated income tax impacts related to the pro forma adjustments, considering the statutory tax rates within Canada. The pro forma financial information does not reflect revenue or cost synergies.

Acquisition of Napps Technology Corporation

On July 1, 2023, the Company acquired substantially all of the net operating assets of Napps Technology Corporation (“Napps”), a Texas-based manufacturer of air- and water-cooled chillers, condensing units and heat pumps, for consideration totaling $5.8 million. The Company paid $4.8 million during the second quarter of fiscal 2024 and paid the remaining $1.0 million to the seller in July 2024. The Company has reported the financial results of the Napps business within the Climate Solutions segment since the date of the acquisition.

Disposition of automotive businesses in Germany

In October 2023, the Company sold three automotive businesses based in Germany (the “disposal group”) to affiliates of Regent, L.P. Prior to the disposition, the Company reported the financial results of the disposal group within its Performance Technologies segment. Net sales of the disposal group included within the Company’s consolidated statement of operations for the three and nine months ended December 31, 2023 totaled $8.0 million and $54.2 million, respectively.

Pending disposition of facilities in Germany

In December 2024, the Company signed a definitive agreement to sell its technical service center and administrative support facility in Germany to a real estate investment firm for €11.5 million ($11.9 million). Earlier this fiscal year, the Company closed the technical service center and reduced headcount in light of the sale of three automotive businesses in Germany during fiscal 2024. The Company expects the sale transaction will close during the first half of fiscal 2026, subject to remaining closing conditions. The Company expects to record a gain on sale, net of costs to sell, of approximately $3.0 million when the transaction is completed. As of December 31, 2024, the Company classified $7.8 million of building and related assets expected to transfer to the buyer as held for sale and presented them within other current assets on its consolidated balance sheet.