Tenneco, Inc. (NYSE: TEN) is among the world’s top designers, manufacturers, and markets of auto parts for original equipment and aftermarket customers. The company primarily operates four key business segments: Motorparts, Performance Solutions, Clean Air and Powertrain. Shares of the auto parts company are skyrocketing 93% through afternoon trading on Wednesday, February 23, 2022. Over the past three months, Tenneco has seen average daily volume of around 811,110 shares. However, volume of 19.59 million shares or dollar volume of around $377.69 million, has already exchanged hands through late trading Wednesday.
Shares of Tenneco are surging after the company announced that it has entered into a definitive agreement to be acquired by famed private equity firm, Apollo Global Management, Inc. (NYSE: APO) at a price per share of $20.00. This represents a massive premium of 100.4% compared to Tenneco’s closing share price of $9.98 on February 22, 2022. This gives the transaction an aggregate value of $7.1 billion including debt.
Upon closing of the transaction, Tenneco will become a private company, but will retain its name, brand, and global presence. The deal is subject to shareholder and regulatory approvals, but Apollo estimates the transaction will close during the second half of 2022.
In addition to the acquisition announcement, Tenneco reported fourth quarter and full year 2021 financial results today. For the full year 2021, the auto parts company generated total revenue of $18 billion, which represents year-over-year growth of 17%. Net income came in at $35 million or $0.42 per diluted share. This compares to a net loss of $1.5 billion during 2020.
“Over the last several years, Tenneco has transformed its business to succeed in today’s environment. 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,” said Brian Kesseler, Tenneco’s chief executive officer. “In Apollo, we have a partner that recognizes the strength of our product portfolio and our ability to serve leading OEM and aftermarket blue-chip customers globally. Specifically, this partnership will allow us to continue to invest in and grow Tenneco’s multiple segments and global footprint. This transaction is also a testament to the achievements of our global team, whose commitment and focus during these extraordinary times have enabled our success.”
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