Tenneco Inc. (NYSE: TEN) (the “Company”) today reconfirmed that it has been reviewing strategic alternatives to maximize shareholder value and announced the addition of Lazard to its existing advisor team as an independent financial advisor. In consultation with its advisors, Tenneco is reviewing and considering, in addition to the current plan to spin off the Company’s Aftermarket and Ride Performance business (“DRiV”), a full range of strategic options including the sale of DRiV and/or the Company’s Powertrain Technology business (“New Tenneco”). Transactions involving other individual product lines in the portfolio are also under consideration.
The Company also announced that it is committed to adding at least one new independent director over the course of 2020 as part of its ongoing Board refreshment process. This follows the recent addition of two new independent directors. The Board will focus on identifying candidates who will bring additional skills and experience relevant to Tenneco’s strategy and operations, as well as with respect to strategic transactions. Tenneco noted that its Board is comprised of 10 highly qualified directors, eight of whom are independent and all of whom are seasoned leaders committed to driving shareholder value.
Gregg M. Sherrill, Chairman of the Tenneco Board, said, “The addition of Lazard to our existing advisor team will add a fresh perspective in our assessment of strategic alternatives. Further, the Board is committed to best practices in corporate governance, and we will continue to refresh its membership with individuals who have the skill sets to help us achieve our strategic and operational objectives.”
As previously announced on January 7, 2020, the Company is implementing a plan to accelerate the reduction of operational costs, improve cash flow performance, reduce leverage, and better position DRiV and New Tenneco for the planned separation. Tenneco has made significant progress to facilitate the planned spin-off of DRiV and has substantially completed all necessary system and process components required for New Tenneco and DRiV to operate independently.
Tenneco today also updated enterprise full year 2019 guidance for key financial targets. As compared to the full year guidance provided on the Company’s Q3 earnings release on October 31, 2019, the expectation for full year 2019 revenues is slightly higher than previously stated guidance. Additionally, adjusted EBITDA, capital expenditures, depreciation/amortization, interest expense and the net leverage ratio are all expected to be in line with previously stated guidance.
Tenneco set its 2019 Q4 and full year earnings release for February 20, 2020. The Company plans to provide a full report of its fourth quarter and full year 2019 results, 2020 guidance and details on its performance acceleration plan.
Brian Kesseler, CEO of Tenneco, said, “Tenneco is building its operational performance acceleration plan off the success of the integration process executed through the end of 2019. The actions from this process yielded better than planned savings, which were delivered ahead of schedule. Our acceleration plan, coupled with our momentum built in 2019, will help to mitigate headwinds from the volatile conditions in the end markets we serve.”
Advisors
Lazard and Barclays are serving as financial advisors to Tenneco and Kirkland & Ellis LLP is serving as legal counsel.
There can be no assurance that the review of strategic alternatives will result in a transaction or other strategic change or outcome. The Company does not intend to provide updates unless or until it determines that further disclosure is appropriate or necessary.
SOURCE: Tenneco
