$1.6 Billion Deal Takes Lake Forest Auto Parts Maker Private

LAKE FOREST, IL — The publicly traded Lake Forest-based automotive parts manufacturer Tenneco has agreed to be acquired by affiliates of private equity firm Apollo Global Management, the company announced Wednesday.

The all-cash deal, which values the company at about $7.1 billion, still requires approval from Tenneco shareholders and is expected to close in the second half of the year.

Apollo funds would pay $1.6 billion in cash and assume the partsmaker's approximately $5.1 billion of debt. The purchase price of $20 per share was more than twice Tenneco's closing price before the deal was revealed.

Dennis Letham, Tenneco's board chair, said board members decided to take the company private after carefully evaluating the offer and reviewing opportunities to create value.

"We are pleased to have reached this agreement with Apollo, which we believe will deliver immediate and certain cash value to Tenneco shareholders at a substantial premium," Letham said in a statement announcing the deal. "We believe this transaction is the right path forward and achieves our goal of maximizing value for Tenneco shareholders, and will benefit our team members, customers and business partners around the world."

Tenneco employs about 73,000 people at more than 270 locations, according to its website. Once the deal is complete, the company's stock will no longer be listed on the New York Stock Exchange, but it will continue to operate under the same name and brand, according to the announcement of the deal.

Michael Reiss, a partner at Apollo, said Tenneco had a long commitment to quality service and innovation.

"We look forward to working with the Tenneco team to build on the strong foundation in place today, investing across their platform and product categories for growth and delivering innovative solutions for customers," Reiss said in the announcement.

Tenneco this week reported its revenue for the fourth quarter of 2021 was $4.4 billion, down 6 percent from the prior year. The company's net loss was $35 million for the final three months of the year, compared to income of $167 million during the same period last year.

According to Bloomberg, the company's stock had been on a "steady slide" for the past five years, falling 85 percent while enduring pressure from investors, shakeups to its board and recent supply chain challenges.

Brian Kesseler, Tenneco's chief executive officer, described the deal as a testament to the achievements of the company's workers around the world. In the announcement of the deal, he said the partnership would allow Tenneco to expand its global footprint.

"Over the last several years, Tenneco has transformed its business to succeed in today's environment," Kesseler said. "This transaction marks a significant milestone and will provide us with a new and exciting platform from which we can continue our global strategy in an evolving and dynamic mobility landscape."

Tenneco shares were up more than 92 percent Wednesday in the wake of news of the transaction.