General Capital to sell most of fleet management ops to Canada's Element Financial for $6.98 bn
29 Jun 2015
Canada's Element Financial Corp (EFN) today struck a deal to buy most of General Electric (GE) Capital's fleet management operations in the US and Mexico, as well as Australia and New Zealand for $6.98 billion (C$8.6 billion) in cash.
Element, one of North America's leading fleet management and equipment finance companies, said that Paris-based Arval, a subsidiary of BNP Paribas and Element's founding partner, has entered into a memorandum of understanding to acquire GE Capital's European fleet operations.
Element said that it had facilitated GE in structuring the transaction with Arval. Together, these two transactions will give a new collaboration between Element and Arval in the global fleet management and on closing of the two transactions, the Element-Arval Global Alliance will manage customer fleets in more than 40 countries.
The North American-based part of the GE portfolio represents C$5.3 billion of the net earning assets acquired by Element while the Australia and New Zealand-based portions represents C$1.8 billion.
Through its expanded alliance with Arval, and now its direct ownership of fleet operations in Mexico, Australia and New Zealand, these deals will provide Element with greater capacity to support international customers with integrated global fleet management solutions.
''Adding these very high quality businesses to our existing fleet operations firmly establishes Element as a leader in the North American fleet management industry,'' said Steven Hudson, Element's CEO. ''But more importantly, by combining these businesses we're being given an unprecedented opportunity to bring together the systems, technologies, products and people that have helped to define excellence in the fleet management industry in North America for more than five decades,'' added Hudson.
''We see the opportunity to expand our fleet management operations into Australia and New Zealand as an excellent fit with our established North American operations,'' said Bradley Nullmeyer, Element's president. ''In addition to strengthening our ability to support international fleet customers through these transactions, we believe the economic scale of Element's expanded fleet management enterprise will enable us to accelerate the development and deployment of the next generation of advanced fleet analytics and data benchmarking tools,'' he added.
With total assets of approximately C$21 billion, Element is one of North America's leading fleet management and equipment finance companies. Element operates across North America in four verticals of the equipment finance market - Fleet Management, Commercial & Vendor Finance, Rail Finance and Aviation Finance.