Back to basics: Thermacore looks to its roots for growth

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You could stir your coffee with a plastic spoon. That would
be safe and comfortable.

Or you could stir your coffee with a liquid-filled copper
rod and hope you let go before your hand burns.

If you’re Lancaster County-based Thermacore Inc., the second
option would at least tell you that your product works. The designer and
manufacturer of heat-pipe technologies took a risk seven years ago when it
agreed to an acquisition by Modine Manufacturing Co., a publicly traded maker
of heat-transfer technologies.

Modine is based in Racine,
Wis.

That was the beginning of a cautionary tale about how,
sometimes, well-intentioned relationships end badly.

“It was supposed to be a good marriage because of our
thermal engineers,” said Gregg Baldassarre, 
Thermacore’s vice president of sales and marketing.

At the time, it seemed like a great partnership, he said.
Modine was a giant in the world of automotive cooling systems, with a worldwide
manufacturing footprint. Manheim Township-based Thermacore was an up-and-coming
player in small-scale electronics cooling, with its patented heat pipes.

Heat pipes are thin copper tubes filled with liquids to
transfer heat from internal sources – such as micro processors – to the
exterior faster than traditional methods found in most computers. Many laptop
computers use similar heat pipes because they use less space.

In May, Thermacore and Modine finalized their divorce.

A team of five senior Thermacore managers bought the company
for more than $13.2 million. But for all practical purposes, the companies were
sleeping in different beds long before that.

Modine and Thermacore looked good on paper, Baldassarre
said. The problem was that neither company had the same focus. Modine was
interested in commodities. Thermacore was more interested in custom designs,
like heat pipes for NASA satellites and parts for better medical devices. Now
that Thermacore is private again, the company wants to get back to its
entrepreneurial roots, something that was stifled under Modine, Baldassarre
said.

“We’ve become more customer-focused,” he said. “Sometimes
when you’re part of a larger organization, you get sucked into feeding the
corporate beast.”

Modine representatives did not immediately return calls for
comment. The company divested Thermacore to focus on its core business
segments, according to a statement on Modine’s Web site.

The new independence should help Thermacore expand and gain
new clients. It already serves a large swath of industries, including
aerospace, energy and communications.

The academic-science community is also catching on to the
company. In 2007, Thermacore’s heat pipes were used to cool the delicate
computers and instruments gathering information about the atmosphere at 130,000
feet above Antarctica. That’s the edge of
space.

If you’re scratching your head, don’t worry. A scientist
will explain.

“The hottest place on the earth to fly, believe it or not,
is in Antarctica because the sun reflects off the ice, and the instruments
essentially see two suns,” said Scott Cannon, a thermal analyst in the Physical
Science Laboratory at New Mexico
State University.

Cannon worked on the Antarctica project with researchers
from the University of Maryland, Penn
State and NASA. He found
Thermacore on the Internet and helped bring the firm onto the research project.

Heat pipes are relatively new for use in high-altitude
flights, Cannon said. So the project was also a test of Thermacore’s
technology. It worked like a charm, he said.

“We’ll go back to Thermacore for replacements for each
payload every year,” Cannon said.

Performance like that is what attracted several investors to
the company prior to management buying Thermacore from Modine.

Managers were able to meet Modine’s price and win the buyout
in a competitive bidding process, said Dean Kline, deputy director of
Harrisburg-based Penn Venture Partners.

Penn Venture, a private equity firm, also owns a portion of
Journal Publications Inc., parent company of the Business Journal.

Penn Venture, with Delaware County-based firms NewSpring
Capital and Argosy Partners, were major financial backers of the Thermacore
buyout, Kline said. Thermacore’s impressive list of global clients, strong
innovation record and good customer service helped leverage that investment, he
said.

“We figured, energized by a buyout, they would step up to
the plate and perform well,” he said. “Our expectations have been met, and they
are performing well.”

After seven years under Modine’s direction, Thermacore is
ready to walk its own path, Baldassarre said. In the 1970s and ‘80s, Thermacore
spent a lot of time on research and development for its clients. The firm’s
getting back to that model, while entertaining new applications and markets,
something it struggled to do under Modine, he said.

Change doesn’t come overnight. Thermacore is still working
on the peripheral aspects of its business: Executive biographies aren’t up on
the Web site yet, and Baldassarre was marking corrections on promotional
literature in his office Oct. 16.

And then there’s the Thermacore family.

After doing things someone else’s way for seven years, even
the best employees need to readjust.

“All the staff has been really excited to be out from under
Modine,” Baldassarre said. “We’re reorganizing that culture.”