Gentherm Submits FDA Filing for ThermAffyx™ Patient Safety System
- Innovative Medical Device: Gentherm has submitted a 510(k) premarket notification for its ThermAffyx™ Patient Safety System, aimed at addressing patient temperature and movement issues during robotic surgeries, which is expected to significantly enhance surgical safety.
- Market Demand Fulfillment: This system combines air-free patient warming with securement technology, uniquely addressing the risks of hypothermia and patient movement during procedures in the Trendelenburg position, thereby filling a critical market gap.
- Technology Transfer Application: Gentherm is leveraging technology from its automotive division, adapting heated seat innovations into medical devices, which is anticipated to be a game changer in operating rooms by improving patient comfort and safety.
- FDA Approval Anticipation: FDA clearance is expected in the first half of 2026, which will lay the groundwork for Gentherm's further expansion into the medical market and drive growth in the medical device sector.
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- Earnings Release Schedule: Gentherm is set to report its fourth quarter and year-end 2025 financial results on February 19, 2026, and will host a conference call at 8 AM (ET) that same day to provide detailed insights into its financial performance, aiming to enhance transparency and investor confidence.
- Conference Call Access Information: Investors can join the call by dialing 1-877-407-4018 (toll-free in the U.S.) or 1-201-689-8471 (international), with Conference ID 13758613, ensuring smooth access for investors to obtain the latest information.
- Webcast and Replay Availability: Gentherm will provide a live webcast and a one-year archived replay of the call on its Investor Relations website, allowing investors who cannot attend in real-time to access the information at their convenience, thereby enhancing information accessibility and transparency.
- Company Background Information: Gentherm is a global leader in thermal management and pneumatic comfort technologies, recording approximately $1.5 billion in sales in 2024 and securing $2.4 billion in new automotive business awards, reflecting its strong market performance and ongoing growth potential.
- Innovative Medical Device: Gentherm has submitted a 510(k) premarket notification for its ThermAffyx™ Patient Safety System, aimed at addressing patient temperature and movement issues during robotic surgeries, which is expected to significantly enhance surgical safety.
- Market Demand Fulfillment: This system combines air-free patient warming with securement technology, uniquely addressing the risks of hypothermia and patient movement during procedures in the Trendelenburg position, thereby filling a critical market gap.
- Technology Transfer Application: Gentherm is leveraging technology from its automotive division, adapting heated seat innovations into medical devices, which is anticipated to be a game changer in operating rooms by improving patient comfort and safety.
- FDA Approval Anticipation: FDA clearance is expected in the first half of 2026, which will lay the groundwork for Gentherm's further expansion into the medical market and drive growth in the medical device sector.
- Transaction Structure and Valuation: Gentherm's merger with Modine Performance Technologies is structured as a Reverse Morris Trust, with an estimated transaction valuation of approximately $1 billion, equating to a 6.8x multiple based on $147 million of synergy-adjusted EBITDA, targeting a close in Q4 2026.
- Revenue and Market Expansion: Post-merger, Gentherm's pro forma revenue base is expected to reach about $2.6 billion, nearly doubling its current scale, while shifting its revenue mix from light vehicles to commercial, heavy-duty equipment, and power generation markets, enhancing cross-selling capabilities.
- Cost Synergies and Growth Potential: Management anticipates achieving approximately $25 million in actionable annual cost synergies by the end of 2028, with revenue synergy potential ranging from $100 million to $500 million, indicating strong growth prospects post-merger.
- Operational Efficiency and Financial Performance: Gentherm aims to leverage Modine's established operating system and low capital intensity to enhance overall operational efficiency, with a synergy-adjusted EBITDA margin expected to reach around 13%, with a pathway to mid-teens in the future.
- Transaction Size: Modine announced the sale of its performance technologies business to Gentherm for approximately $1 billion, representing a valuation of about 6.8 times the adjusted EBITDA for 2025, indicating strong market recognition of its assets.
- Shareholder Benefits: Before the transaction closes, Modine is set to receive a cash distribution of $210 million, while shareholders will receive around 21 million shares of newly issued Gentherm common stock, allowing them to hold approximately 40% of the combined company, enhancing long-term shareholder value.
- Synergy Potential: The combined company is projected to have revenue of $2.6 billion and an adjusted EBITDA margin of 13%, with expected annual synergies of $25 million through cost optimization and operational efficiencies, significantly improving overall financial performance.
- Strategic Implications: Analysts view this transaction as a positive strategic move; while the sale of the entire engine business was unexpected, it does not negatively impact Modine's long-term prospects and may strengthen its focus on climate solutions.
- Cash Distribution Expectation: Modine is expected to receive a cash distribution of approximately $210 million from the spun-off unit before the transaction closes, which will enhance its financial flexibility for future business developments.
- Shareholder Structure Change: After the transaction, Modine shareholders will own about 40% of the new combined company, while Gentherm shareholders will hold the remaining 60%, allowing Modine to maintain a significant market presence post-merger.
- Strategic Focus Shift: Following the spin-off of the Performance Technologies division, Modine will concentrate solely on its Climate Solutions segment, particularly targeting the rapidly growing markets of data center cooling and commercial HVAC & refrigeration.
- Positive Market Reaction: Following the merger announcement, Modine's stock surged over 17% in early trading on Thursday, reflecting investor optimism about the merger's prospects, with retail sentiment shifting from 'bearish' to 'bullish', indicating strong confidence in future growth.
Earnings Performance: Gentherm (THRM) reported quarterly earnings of $0.73 per share, exceeding the Zacks Consensus Estimate of $0.64, although down from $0.75 a year ago. The company also posted revenues of $386.87 million, surpassing estimates by 3.16%.
Stock Outlook: Despite the earnings beat, Gentherm shares have declined about 14% this year, underperforming the S&P 500's 13.9% gain. The stock currently holds a Zacks Rank #4 (Sell), indicating expected underperformance in the near future.
Future Earnings Estimates: The consensus EPS estimate for the upcoming quarter is $0.53 on revenues of $348.48 million, with a fiscal year estimate of $2.21 on $1.46 billion in revenues. Recent estimate revisions have been unfavorable.
Industry Context: Gentherm operates in the Automotive - Original Equipment industry, which ranks in the top 32% of Zacks industries. The performance of the stock may be influenced by broader industry trends and the upcoming earnings report from Innoviz Technologies Ltd. (INVZ).









