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Tenneco's (TEN) Ohlins Buyout to Expand Product Portfolio

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Tenneco Inc. has announced that it inked a deal to acquire a Swedish technology company, Ohlins Racing A.B. (“Ohlins”). The acquisition of Ohlins, which develops suspension systems for the automotive and motorsport industries, is likely to aid Tenneco to progress in the areas of intelligent suspension, autonomous driving and mobility.

Subject to the satisfaction of certain customary closing conditions, the acquisition is likely to close in first-quarter 2019. Founder Kenth Ohlin will retain a minority stake in Ohlins and collaborate with Tenneco to continue with his technological vision. The excellent technology team of Ohlins will aid Tenneco to expand its product offerings for its present and future customers. This collaboration will also help in expanding Tenneco’s business in the mobility markets. The acquisition of Ohlins will speed up the development of advanced original equipment (OE) intelligent suspension solutions.

In third-quarter 2018, Tenneco’s adjusted earnings and revenues beat their respective Zacks Consensus Estimate. Both figures increased year over year, majorly driven by improved growth across all the product applications. In the past year, Tenneco underperformed the industry it belongs to. The company’s shares have declined 39.8% over this period, whereas the industry decreased by 23.1%.


Zacks Rank & Other Key Picks

Currently, Tenneco carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the auto space are Allison Transmission Holdings, Inc. (ALSN - Free Report) , Fox Factory Holding Corp. (FOXF - Free Report) and AutoZone, Inc. (AZO - Free Report) . While Allison Transmission and Fox Factory currently sport a Zacks Rank #1 (Strong Buy), AutoZone carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 10%. Over the past six months, shares of the company have surged 9.2%.

Fox Factory has an expected long-term growth rate of 17.2%. Over the past six months, shares of the company have risen 89.4%.

AutoZone has an expected long-term growth rate of 12.2%. Over the past six months, shares of the company have risen 25.3%.

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