Tenneco completed its acquisition of Federal-Mogul, a global supplier to original equipment manufacturers and the aftermarket.
“Today marks an important step for Tenneco as we progress toward the transformation of our company into two strong, leading global businesses with the scale and financial flexibility to drive long-term value creation,” said Brian Kesseler, co-CEO, Tenneco.
Cash consideration of $800 million was financed through a new senior credit facility that will replace Tenneco’s existing senior credit facilities and certain senior facilities of Federal-Mogul.
According to a related 8-K filing, JPMorgan Chase Bank served as administrative agent for $4.9 billion of total debt financing, consisting of a $1.7 billion term loan A, a $1.7 billion term loan B and a $1.5 billion revolving credit facility. Proceeds from the facility were used to finance the cash consideration portion of the purchase price for the acquisition, to refinance Tenneco’s existing senior credit facilities and certain senior credit facilities of Federal-Mogul and to pay fees and expenses relating to the Acquisition and the financing. The remainder, including future borrowings under the revolving credit facility, will be used for general corporate purposes.
The credit facility is guaranteed on a senior basis by certain material domestic subsidiaries of Tenneco. Drawings under the revolving credit facility may be in U.S. Dollars, pounds sterling or euros. The credit facility is secured by substantially all domestic assets of Tenneco and the subsidiary guarantors and by pledges of up to 66% of the stock of certain first-tier foreign subsidiaries.
Today’s closing precedes the planned separation of the combined businesses into two independent, publicly traded companies through a tax-free spin-off to shareholders that will establish an aftermarket and ride performance company and a powertrain technology company. The spin-off is expected to be complete in late 2019.
“This transaction makes possible the ability to create two new product-focused companies with even stronger portfolios positioned to capture unique opportunities in their respective markets,” said Roger Wood, co-CEO, Tenneco. “Now that we have completed the acquisition, we look forward to accelerating the successful realignment of the businesses and creation of the new companies.”
Headquartered in Lake Forest, IL, Tenneco is a designer, manufacturer and marketer of ride performance and clean air products and technology solutions for diversified markets.
