Acquisitions |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Business Combination [Abstract] | |
| Acquisitions | Note 3 – Acquisitions Modine Transaction On October 1, 2026 (the “Closing Date”), the Company completed its previously announced combination of Performance Technologies with the Company (the “Modine Transaction”). The Modine Transaction was structured as a Reverse Morris Trust transaction, where a wholly owned subsidiary of Modine (“SpinCo”), owning Performance Technologies, was spun off to Modine shareholders (the “Distribution”) and immediately thereafter merged with a wholly owned subsidiary of the Company, with SpinCo as the surviving entity becoming a wholly owned subsidiary of the Company (the “Merger”). The Company issued 23,735,961 shares of the Company’s common stock, no par value (“Common Stock” or “Gentherm Common Stock”) to the Modine shareholders of record as of close of business on September 28, 2026 (the “Record Date”, and such holders of Modine common stock as of the Record Date, the “Record Date Modine Shareholders”). Upon completion of the Modine Transaction, the Record Date Modine Shareholders owned approximately 43.62% of the outstanding shares of Gentherm Common Stock (without taking into account any overlapping shareholder ownership), and continuing Gentherm shareholders owned approximately 56.38% of the outstanding shares of Gentherm Common Stock (without taking into account any overlapping shareholder ownership). The preliminary estimate of purchase consideration is approximately $800,000, subject to customary closing adjustments. Prior to the Distribution and the Merger, SpinCo made a cash distribution to Modine of $155,991 (the “SpinCo Cash Distribution”). In connection with the Modine Transaction, the Company also declared a special cash dividend (the “Cash Dividend”) in an aggregate amount equal to $63,500, or $2.07 per share of Gentherm Common Stock. The Cash Dividend was paid in cash on October 7, 2026, to Gentherm shareholders of record as of the close of business on September 28, 2026. On June 29, 2026, SpinCo entered into a credit agreement, providing for a senior secured delayed-draw term loan facility with aggregate commitments of up to $250,000 (the "DDTL Facility"). On the Closing Date, SpinCo borrowed $250,000 of term loans under the DDTL Facility (the “Term Loans”), the proceeds of which were used by SpinCo on the Closing Date to pay the SpinCo Cash Distribution and other amounts required at closing, such as the estimated net working capital adjustment. Remaining proceeds will be used for general corporate purposes. Upon completion of the Modine Transaction, this represents indebtedness of a wholly owned subsidiary of the Company. The obligations under the DDTL Facility are unconditionally guaranteed by Gentherm and certain of Gentherm’s wholly-owned domestic subsidiaries, subject to customary exceptions, and are secured by substantially all of the assets of SpinCo, Gentherm and the other guarantors, subject to customary exceptions. The Term Loans amortize in equal quarterly installments of 0.625% for the first eight quarters and 1.250% for each quarter thereafter until maturity. The remaining balance becomes due on June 29, 2031. Due to the proximity of the Closing Date with the date of filing of this report, the initial accounting for the Modine Transaction is not yet completed. As a result, it is not practicable to disclose the preliminary allocation of the purchase price to assets acquired and liabilities assumed, or to provide other related disclosures. The accounting impact of the Modine Transaction will be included in the consolidated financial statements beginning in the Company's fourth quarter of 2026. During the three and nine months ended September 30, 2026, the Company incurred $6,344 and $33,396, respectively, of costs related to the Modine Transaction. Such fees are recorded in Selling, general and administrative expenses. Innovative Medical Equipment, LLC On July 1, 2026, the Company acquired all of the membership interests in Innovative Medical Equipment, LLC (“IME”), a provider of the ThermaZone® thermal therapy device. ThermaZone is a non-opioid thermal therapy solution designed to support pain management and recovery through controlled hot-and-cold therapy. The total consideration was $34,652, which is comprised of cash payments, net of cash acquired, and contingent consideration with a fair value of $500. The acquisition was accounted for as a business combination within our Medical segment, with the purchase price allocated on a preliminary basis using information available as of September 30, 2026, which primarily resulted in the recognition of other intangible assets of $15,900 and goodwill of $15,610. The estimated fair value of the other intangible assets was based on third-party valuations and management’s estimates, generally utilizing income and market approaches. Goodwill recognized in this transaction is primarily attributable to the Company’s expected future economic benefits from the enhanced access to high-growth markets including private label opportunities through IME’s ThermaZone technology. The goodwill is expected to be deductible for tax purposes. The pro forma effects of this acquisition would not materially impact the Company’s reported results for any period presented, and as a result no pro forma financial statements are presented herein. |