PHH Arval Sale for 1.35 billion to Element Financial Corp Rumored

Reuters report­ed last week that Cana­di­an equip­ment finance com­pa­ny Ele­ment Finan­cial Corp is in exclu­sive talks to buy PHH Arval for about $1.35 bil­lion.

Ele­ment has not com­ment­ed, but PHH issued a state­ment late last week acknowl­edg­ing that it is “engaged in dis­cus­sions regard­ing a poten­tial sale of PHH Arval,” while adding that there “can be no assur­ance that these dis­cus­sions will result in a defin­i­tive agree­ment or on what terms. PHH had announced in Feb­ru­ary that it was con­sid­er­ing sell­ing or sep­a­rat­ing its fleet leas­ing busi­ness and mort­gage busi­ness.

Reuter’s source said a deal with Ele­ment for PHH Arval could come with­in the next two weeks. But the source added that the two sides had not yet final­ized the deal and some details, includ­ing cus­tomer issues, need­ed to be worked out.

Ele­ment, a 25-year old Cana­di­an com­pa­ny that pro­vides financ­ing for indus­tri­al, aero­space and auto­mo­tive equip­ment leas­ing, plans to use the PHH busi­ness as a plat­form for future acqui­si­tions, the source said. Cur­rent­ly, it has total leased assets of more than $4 bil­lion and oper­ates across North Amer­i­ca. It plans to more than triple its assets with­in sev­er­al years by expand­ing in North Amer­i­ca and Europe.

Many ana­lysts have been skep­ti­cal that PHH could eas­i­ly sell PHH Arval sep­a­rate­ly because of cost­ly tax con­se­quences of a breakup of the two com­pa­nies.

Return to Fleet Man­age­ment Week­ly

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