Gentherm (Nasdaq: THRM), a maker of thermal management and pneumatic comfort systems, mostly for vehicles, closed its Reverse Morris Trust combination with Modine's Performance Technologies business on October 1, 2026. The next day, value investor Colin King (@valuedontlie) flagged the combined company as trading below 6x EBITDA. Our rough math from the deal filings puts it near 5.8 times synergy-adjusted EBITDA but above 6 times without the promised cost savings, so the answer depends on whether those savings arrive.
This is journalism and commentary, not investment advice. We hold no position unless stated.
Key facts
- Ticker and exchange: Gentherm Incorporated, THRM, Nasdaq.
- Situation type: Post-spin-off combination. Modine (NYSE: MOD) spun off its Performance Technologies unit and merged it into Gentherm in a Reverse Morris Trust.
- Terms: Modine holders received 0.44619 Gentherm shares per Modine share and own about 43.62% of the combined company; prior Gentherm holders own about 56.38%.
- Cash: Modine received about $156 million from the unit, and Gentherm paid a $2.07 special dividend on October 7, 2026 to holders of record September 28.
- Scale: Pro forma revenue of $2.6 billion with a 13% synergy-adjusted EBITDA margin, per the January 29, 2026 deal announcement.
- Price: THRM closed at $33.63 on October 1, $31.30 on October 2 and $31.05 on October 13, 2026.
Is THRM a good bet right now?
The low multiple is real only if the combined earnings show up. Using the pro forma filing's 54.32 million basic shares, the $31.05 close gives a market value of about $1.69 billion. Pro forma long-term debt of $527.3 million less $241.4 million of cash, as of June 30, 2026, adds about $287 million of net debt, for an enterprise value near $1.97 billion.
Against 13% of $2.6 billion, or about $338 million of synergy-adjusted EBITDA, that is about 5.8 times. Take out roughly $25 million of identified cost synergies and it is about 6.3 times. Those inputs are older trailing figures, so treat this as a rough check, not a precise multiple.
Why the cheap-multiple case is getting attention
- Spin-off selling. Modine holders received Gentherm shares they may not want, and THRM slipped about 8% from its October 1 close to October 13.
- A bigger, broader company. About a third of combined revenue comes from outside light vehicles, such as power generation and commercial vehicles.
- Synergies. The companies identified about $25 million of annual cost synergies.
- Moderate leverage. The January announcement put pro forma net leverage at about 1.0 times.
Who's making this call and why?
Colin King (@valuedontlie) writes a stock newsletter, has about 12,460 followers on X and describes his approach as "All value. No advice." On October 2, 2026, in a post about recent spin-offs, he wrote, "$THRM RMT now trading below 6x EBITDA". He did not say whether he owns shares.
Track record. In our tracking, Colin King is 11-8 (a .579 win rate) on 19 calls scored at 180 days against the S&P 500, with an average edge of +35.14 percentage points, ranking 3rd all time. That average is lifted by one Babcock & Wilcox (BW) call that beat the market by 688.2 points; his median edge is +4.18. His THRM post is logged as neutral. See the scoreboard.
Other supporters:
- FilingSniper (@FilingSniperx), which posts on SEC filings, replied that the sub-6x figure is "still pre-synergy" and added, "next 10-q segment breakout is the real test."
Who disagrees?
- CK Capital (@CKCapitalxx), who is bullish on what Modine kept, described the unit Gentherm took on this way: "That's $1.1B of revenue, shrinking 3%, at a 13% EBITDA margin."
- Our own math. We could not reproduce a figure clearly below 6 times without counting synergies.
- Integration risk. The unit has about 5,000 employees in 10 countries, and the gains depend on cross-selling and cost cuts that have not yet been reported.
What are the key facts to verify?
- Closing terms and the special dividend in Gentherm's October 1, 2026 release.
- The $147 million post-synergy EBITDA and 6.8 times deal multiple in the January 29, 2026 announcement.
- Pro forma shares, cash and debt in the pro forma financial statements.
- The first combined quarter's segment results, margins and synergy progress.
What would prove it right or wrong?
Signals the cheap-multiple view holds:
- The first combined quarterly report shows EBITDA running near a 13% margin.
- Cost synergies are confirmed on schedule.
- Spin-off selling fades and the share price stabilizes.
Signals it is failing:
- Performance Technologies revenue keeps shrinking.
- Margins come in well below 13%.
- Gentherm lowers guidance or takes on more debt.
This is journalism and commentary, not investment advice. We hold no position unless stated.