Welcome!

News Feed Item

Element Financial Closes PHH Arval Acquisition

US$1.4 Billion Transaction Expected to Deliver Ten Percent Accretion to 2015 Earnings per Share

TORONTO, ONTARIO -- (Marketwired) -- 07/07/14 -- Element Financial Corporation (TSX:EFN) ("Element" or the "Company") has closed the previously announced acquisition of the assets and operations of PHH Arval (the "Acquisition") for a purchase price of US$1.4 billion. The all-cash transaction was financed with a combination of 74,416,500 subscription receipts (the "Subscription Receipts") at $12.75 per Subscription Receipt, $345,000,000 aggregate principle amount debentures and 5,000,000 cumulative 5-year rate reset preferred shares series E at $25.00 per preferred share (the "Capital Raise"). Concurrent with the closing of the Acquisition, each Subscription Receipt will be exchanged for one common share of the Company as soon as practicable in accordance with their terms with the Subscription Receipts to be delisted from the Toronto Stock Exchange.

The Acquisition increases Element's total assets to $10 billion and raises the Company's tangible leverage to 3.2:1 from 1.6:1 as at March 31, 2014 while providing balance sheet capacity to fund forecasted growth. Concurrently, the increased scale of Element's balance sheet also provides the Company with the opportunity to underwrite larger transactions in each of its four North American business verticals - Commercial & Vendor Finance, Aviation Finance, Railcar Finance and Fleet Management. The Acquisition and the Capital Raise are expected to deliver at least ten percent of earnings accretion to common shareholders in 2015. They also set Element on a path to qualify the Company for investment grade ratings which would offer additional accretion to the Company's shareholders as these ratings are applied to Element's capital structure.

"This accretive transaction doubles both our asset base and our tangible leverage at the same time that it sets in motion a process for achieving investment grade ratings to reduce our funding costs that will drive incremental returns for our shareholders," said Steven K. Hudson, Element's Chairman and Chief Executive Officer.

The transaction is also transformational for Element's fleet management business increasing the size of the Company's portfolio of fleet assets to $6 billion. The combined employee base will serve customers through Element Fleet Management's US head office in Sparks, Maryland and its Canadian head office in Mississauga, Ontario supported by the Arval global alliance that will service clients' needs in more than 40 countries beyond North America.

"The transaction positions Element Fleet Management as North America's premier fleet management provider," said Bradley Nullmeyer, President of Element Financial Corporation. "Through Element's other business verticals, it also presents an opportunity for our new fleet clients to access equipment financing solutions for a much broader range of their capital assets - from fork lifts and highway tractors to railcars and aircraft."

Element's Fleet Management business will be led by Jim Halliday, current President of PHH Arval. "Element's focused and disciplined approach to growth presents us with an exceptional opportunity to deliver new solutions and a broader scope of services to our clients," said Halliday. "I believe our passion for customer service together with the added scale and financial strength to support increased investment in technology and product development, sets Element Fleet Management apart as North America's premier fleet management company."

About Element Financial Corporation

With total assets of $10 billion, Element Financial Corporation is one of North America's leading equipment finance companies. Element operates across North America in four verticals of the equipment finance market - Commercial & Vendor Finance, Aviation Finance, Railcar Finance and Fleet Management.

Forward-Looking Statements

This release includes forward-looking statements regarding Element and its business. Such statements are based on the current expectations and views of future events of Element's management. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements. Forward-looking statements in this release include those related to the acquisition by Element of PHH Corporation's North American Fleet Management Services business, the achievement of strategic and financial objectives in connection with the acquisition, the impact of the acquisition on Element's financial metrics (including accretion to Element shareholders and Element's anticipated level of leverage), the attainment of growth opportunities and the integration of the Fleet Management Services business. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting Element, including risks regarding the equipment finance industry, economic factors and many other factors beyond the control of Element. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Element undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Many private cloud projects were built to deliver self-service access to development and test resources. While those clouds delivered faster access to resources, they lacked visibility, control and security needed for production deployments. In their session at 18th Cloud Expo, Steve Anderson, Product Manager at BMC Software, and Rick Lefort, Principal Technical Marketing Consultant at BMC Software, will discuss how a cloud designed for production operations not only helps accelerate developer...
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, will discuss how leveraging the Industrial Interne...
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
Struggling to keep up with increasing application demand? Learn how Platform as a Service (PaaS) can streamline application development processes and make resource management easy.
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...
Up until last year, enterprises that were looking into cloud services usually undertook a long-term pilot with one of the large cloud providers, running test and dev workloads in the cloud. With cloud’s transition to mainstream adoption in 2015, and with enterprises migrating more and more workloads into the cloud and in between public and private environments, the single-provider approach must be revisited. In his session at 18th Cloud Expo, Yoav Mor, multi-cloud solution evangelist at Cloudy...
In his session at 18th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., will focus on real world deployments of DDoS mitigation strategies in every layer of the network. He will give an overview of methods to prevent these attacks and best practices on how to provide protection in complex cloud platforms. He will also outline what we have found in our experience managing and running thousands of Linux and Unix managed service platforms and what specifically c...
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
Artificial Intelligence has the potential to massively disrupt IoT. In his session at 18th Cloud Expo, AJ Abdallat, CEO of Beyond AI, will discuss what the five main drivers are in Artificial Intelligence that could shape the future of the Internet of Things. AJ Abdallat is CEO of Beyond AI. He has over 20 years of management experience in the fields of artificial intelligence, sensors, instruments, devices and software for telecommunications, life sciences, environmental monitoring, process...
The demand for organizations to expand their infrastructure to multiple IT environments like the cloud, on-premise, mobile, bring your own device (BYOD) and the Internet of Things (IoT) continues to grow. As this hybrid infrastructure increases, the challenge to monitor the security of these systems increases in volume and complexity. In his session at 18th Cloud Expo, Stephen Coty, Chief Security Evangelist at Alert Logic, will show how properly configured and managed security architecture can...
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
Unless you don’t use the internet, don’t live in California, or haven’t been paying attention to the recent news… you should be aware that self-driving cars are on their way to becoming a reality. I have seen them – they are real. If you believe in the future reality of self-driving cars, then continue reading on. If you don’t believe in the future possibilities, then I am not sure what to do to convince you other than discuss the very real changes that will roll out with the consumer producti...
A critical component of any IoT project is the back-end systems that capture data from remote IoT devices and structure it in a way to answer useful questions. Traditional data warehouse and analytical systems are mature technologies that can be used to handle large data sets, but they are not well suited to many IoT-scale products and the need for real-time insights. At Fuze, we have developed a backend platform as part of our mobility-oriented cloud service that uses Big Data-based approache...
See storage differently! Storage performance problems have only gotten worse and harder to solve as applications have become largely virtualized and moved to a cloud-based infrastructure. Storage performance in a virtualized environment is not just about IOPS, it is about how well that potential performance is guaranteed to individual VMs for these apps as the number of VMs keep going up real time. In his session at 18th Cloud Expo, Dhiraj Sehgal, in product and marketing at Tintri, will discu...