Samsung Electronics is in talks to acquire Modine Manufacturing, a U.S. maker of cooling systems for data centers, Bloomberg reported on Thursday, citing people familiar with the matter. Modine had a market value of about $5.6 billion at that day's close, according to technology news site The Next Web, which relayed the report.

A purchase would be the South Korean group's second in data center cooling in two years and far larger than the first. Samsung paid 1.5 billion euros for Germany's FläktGroup last year, according to The Next Web. For investors in Asia, the talks are a sign of where Samsung may put the cash its memory chips are generating: into the equipment that keeps artificial intelligence servers from overheating.

A deal could come together within weeks, the people told Bloomberg, according to The Next Web's account. No final decision has been made, the talks could still collapse and another bidder could emerge. Samsung and Modine both declined to comment, the outlet said. BizTimes Milwaukee, a business publication in Modine's home state, also reported the talks, citing Bloomberg News.

Modine Shares Jump 28%

Modine closed regular trading in New York on Thursday at $106.10 and then climbed past $135 in late trading, a gain of 28%, The Next Web reported.

That rebound followed a weak stretch. The shares had fallen about 15% since Nov. 3, when the company's quarterly results disappointed investors, the outlet said.

Samsung, which The Next Web put at about $910 billion in market value after a 72% rise this year, gained as much as 3.9% in Seoul before giving back part of the move, the outlet said. Capital Times has separately covered Samsung's third-quarter results.

Bloomberg Intelligence described Modine as small beside the big makers of heating and air-conditioning equipment, “making it an attractive target for vertical integration in AI infrastructure,” The Next Web quoted the research unit as saying. Daikin, LG Electronics and Vertiv are all pursuing the same data center customers, the outlet said.

What Samsung Would Be Buying

Modine is based in Racine, Wisconsin, and employs more than 9,000 people, with operations in North America, Europe and Asia, according to the company. It spent decades making heating and cooling equipment for commercial buildings and industrial machines, The Next Web said.

That changed on Oct. 1, when Modine completed the spin-off of its Performance Technologies business, which was then combined with Gentherm through a Reverse Morris Trust transaction, the company said in a statement that day. What is left is a company built around two segments, Data Centers and Commercial HVAC. Modine has said it intends to operate as Modexus Solutions once shareholders approve the name change, because Gentherm acquired the Modine brand in the transaction.

The numbers show how fast the remaining business is growing. Net sales, which still included the unit since spun off, rose 35% to $994.4 million in the quarter ended Sept. 30, Modine said on Nov. 3. Data Centers segment sales were $439.7 million, up 95% from $225.0 million a year earlier, which the company attributed mainly to hyperscale customers in North America.

Growth has come at a cost. The Data Centers segment's gross margin fell 470 basis points to 19.7%, which Modine blamed on higher material, component and tariff costs. Earnings per share dropped to 56 cents from 83 cents, mostly because of taxes tied to the spin-off, while adjusted earnings per share rose to $1.35 from $1.06.

The balance sheet has stretched as well. Net debt stood at $573.7 million on Sept. 30, up $210.9 million from the end of the prior fiscal year, which Modine attributed mainly to higher working capital and share purchases linked to its equity compensation plan. Free cash flow for the first half of the fiscal year was a use of $145.6 million, reflecting spending on data center production capacity and larger inventories.

Neil D. Brinker, Modine's president and chief executive, said in the results statement that the Data Centers segment had “record orders and backlog.” The company raised its outlook for the year ending in March 2027: it expects revenue to grow 50% to 55% and adjusted earnings before interest, taxes, depreciation and amortization of $470 million to $500 million, in both cases excluding the business it spun off.

BizTimes Milwaukee reported that the company took in a record $1 billion of orders in the latest quarter and last week disclosed a $400 million order for custom air handling units from a data center customer it did not name. That is in addition to an existing $4 billion long-term cooling agreement, BizTimes said.

A Bigger Bet on Cooling

Samsung's interest fits a pattern. The company remains heavily dependent on memory chips, and analysts have pushed it to use that cash on businesses tied to the build-out of AI data centers, The Next Web said. Capital Times has separately covered a report on Samsung's second Texas fab.

No price has been reported. Any offer would have to start from a share price that, on The Next Web's account, moved sharply on Thursday night, and from a company that has just raised its own forecasts.

Modine has a chance to make its case for a higher value in public. The company is due to present longer-term revenue and earnings targets at an analyst and investor day on Nov. 18, Brinker said in the results statement.