LAKE FOREST, Ill.—Tenneco Inc. is going private.
The Lake Forest-based auto parts maker said Feb. 23 that it had agreed to an acquisition by private equity firm Apollo Global Management Inc. in an all-cash transaction with an enterprise value of $7.1 billion, including debt.
The purchase price ($20 per share), Tenneco said, represents a 100.4-percent premium over the Feb. 22 closing share price of $9.98. It also represents a 71.6-percent premium over the Tenneco's unaffected 90-day VWAP. By 1:30 p.m. EST on Feb. 23, Tenneco's stock already had risen $9.30 a share, to $19.28.
Rumors of the marriage between Tenneco and Apollo go back at least two years. Crain's Detroit Business reported in January 2020 that the private equity firm had made a $4.3 billion offer for Tenneco's powertrain unit.
At the time, it was unclear whether Tenneco's board would seriously consider the offer.
Dennis Letham, chairman of the board of Tenneco, said the decision to sell the company to Apollo was not taken lightly.
"The board's decision follows careful evaluation of the transaction and thoughtful and comprehensive review of value creation opportunities for Tenneco," he said in a statement. "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."