Deal establishes Toronto-based Element as a leader in North American fleet management industry
Toronto—Element Financial Corporation, one of North America’s leading fleet management and equipment finance companies, has announced it has entered into a definitive agreement with General Electric to acquire GE Capital’s remaining North American fleet management operations in the U.S. and Mexico, as well as GE Capital’s fleet management operations in Australia and New Zealand.
The deal is an all-cash purchase worth C$8.6 billion. Element previously acquired the Canadian operations of GE Capital’s North American fleet management business in June of 2013.
“Adding these very high quality businesses to our existing fleet operations firmly establishes Element as a leader in the North American fleet management industry,” Steven Hudson, Element’s CEO said. “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.”
In addition to the purchase of net earning assets in the U.S., Mexico, Australia and New Zealand, the Transaction includes the transfer of the employees, systems, offices, agreements, intellectual property and other assets required to operate the acquired fleet management businesses in these jurisdictions.
In a related transaction, Element confirmed today that Paris-based Arval, a wholly-owned subsidiary of BNP Paribas and Element’s founding partner in the Element-Arval Global Alliance, has entered into a memorandum of understanding to acquire GE Capital’s European fleet operations. Element facilitated GE in structuring the transaction with Arval. Together, these two transactions signal a new level of collaboration between Element and Arval in serving the global fleet management needs of international customers. On closing of the two transactions, the Element-Arval Global Alliance will be capable of managing customer fleets in more than 40 countries.
The North American-based portion 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 transactions provide Element with greater capacity to support international customers with integrated global fleet management solutions.
“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.