Valvoline Inc. to repurchase up to USD1 billion of its common stock

Following the sale of its Global Products business to Saudi Aramco early this year, Valvoline Inc., based in Lexington, Kentucky, U.S.A., has commenced a modified “Dutch auction” tender offer to repurchase up to USD1.0 billion of its common stock. 

A Dutch auction is a type of offering which uses a bidding process to find an optimal market price for a security. Valvoline said it will repurchase up to USD1.0 of its common stock at a price not greater than USD40.00 per share but not less than USD35.00 per share, in cash, less any applicable withholding taxes.

If the offer is fully subscribed, the number of shares to be purchased will be approximately 15.08% to 17.23% of Valvoline’s issued and outstanding shares as of May 5, 2023, depending on the purchase price.

At the maximum purchase price of USD40.00 per share, the offer would represent a premium of approximately 4% to the NYSE closing price of the shares on May 10, 2023 of USD38.45 per share.

Valvoline Inc. operates the second largest quick lube service chain by number of stores in the United States, with Valvoline Instant Oil Change^SM, and the third largest quick lube service chain in Canada, with the Valvoline Great Canadian Oil Change brand. 

The repurchase of up to USD1.0 billion of shares is being made pursuant to the 2022 Share Repurchase Authorization approved by its Board of Directors on November 10, 2022. As of May 5, 2023, the remaining capacity under the 2022 Share Repurchase Authorization was approximately USD1.37 billion. 

The company intends to pay for the purchase of shares in the Offer with cash on hand from the net proceeds received from the sale of its Global Products business.

Saudi Aramco purchased the global products business of Valvoline Inc. for USD2.65 billion, through one of its wholly-owned subsidiaries.  

The offer will expire at 12:00 midnight, at the end of the day, New York City time, on Thursday, June 8, 2023, unless extended or terminated by Valvoline. Tenders of shares must be made prior to the expiration of the offer and may be withdrawn at any time prior to the expiration of the offer. 

The offer will not be conditioned upon any minimum number of shares being tendered and will not be subject to a financing condition; however, the offer is subject to a number of other conditions described in the Offer to Purchase.

The dealer managers for the offer are BofA Securities, Inc., Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC.