Racine-based Modine Manufacturing Co. plans to sell its stake in Nikkei Heat Exchanger Co. Ltd., a joint venture with Japanese firm Nippon Light Metal Co. Ltd.
The joint venture manufactures and sells aluminum heat exchangers. It was established in 1987 to help create a new opportunity for Modine to enter the Japanese market. Nippon Light Metal will purchase Modine’s stake for an undisclosed price. The deal is expected to be complete in the next few weeks.
Tom Burke, president and chief executive officer of Modine, said the Japanese joint venture was a valuable and successful partnership but it is time to divest from the asset.
“The sale of our stake in this joint venture aligns with our announcement earlier this year to evaluate the strategic alternatives for our automotive business, and allows us to further focus on the development and growth of our other core business segments to drive shareholder returns," Burke said.
Modine announced earlier this year that it plans to sell its automotive business, which represented nearly 24% of the company’s revenue in fiscal 2019 at more than $542 million.
On an earnings call Thursday, Burke said the company is continuing its sale process and declined to discuss any specifics. Modine incurred around $8.4 million in advisor and consulting fees related to the sale during the quarter.