Racine-based Modine announced Tuesday that it has entered into a $4 billion long-term capacity agreement (LTA) with a data center customer to supply its subsidiary Airedale’s cooling solutions.

The agreement mandates that Modine supply more than $4 billion of Airedale data center cooling products from 2027 to 2029. The company received a $165 million up-front cash payment at the time the deal was made, according to a press release.

The LTA “advances Modine’s strategic objective of accelerating growth in its data centers segment and reflects the collaborative approach Modine takes with key customers,” the release said.

Investors responded favorably to the news. Modine’s stock, which ended Friday around $261 per share, climbed nearly to nearly $320 per share Tuesday morning before retreating to just over $300 as of the early afternoon.

“This landmark agreement is a testament to the successful execution of our long-term strategy to grow our data centers business and validates our position as a technology leader,” said Neil Brinker, president and CEO of Modine. “We are focused on providing our key customers with the mission-critical cooling solutions necessary to support the build-out of the digital economy, and this agreement is a perfect example of that commitment in action.”

The company did not immediately respond to a request for comment regarding the local impact from the LTA.

News of the agreement comes months after Modine announced the opening of its new 153,000-square-foot plant at 3303 W. Oakwood Road in Franklin. The plant serves as an Airedale manufacturing facility, making products including high-efficiency chillers, indoor air systems, liquid cooling technologies and intelligent controls. When its opening was announced, the company said the new plant would create more than 300 new jobs by March this year. Approximately 420 employees are expected to work at the facility within three years, an increase from an initial Modine announcement.

“Securing this substantial, multi-year agreement with a strategic partner highlights the strength of our Airedale technology and our ability to deliver innovative, reliable cooling solutions at scale,” said Art Laszlo, recently appointed president of Modine’s data centers segment, in the release. “The dedicated capacity and upfront investment will allow us to confidently expand our operations to meet the stringent demands of our customer. This is an exciting opportunity for our business, and we are proud to support our customer’s growth trajectory with our advanced Airedale solutions.”

Credit: Loopnet Modine’s Airedale plant at 3303 W. Oakwood Road.