Element Financial to explore sale of certain Canadian assets
TORONTO Oct 14 (Reuters) - Element Financial Corp said on Wednesday it plans to sell its Canadian commercial and vendor (C&V) operations that help finance everything from trucks to printers, as it accelerates its transformation into North America's leading fleet management and services enterprise.
The Toronto-based company, which acquired General Electric's fleet management business in the U.S., Mexico, Australia and New Zealand for $6.9 billion in June, said it will reinvest proceeds from the sale of the C&V business into organic growth and acquisition opportunities in its fleet management business.
The company said it has retained Barclays Capital to act as its advisor in the development of strategic alternatives for its Canadian C&V business. Element said it plans to be in a position to act on any offers or recommendations in the first-quarter of 2016.
"We have already achieved unprecedented scale in the North American fleet management industry," said Chief Executive Steven Hudson, in a statement.
Hudson added that given the consolidation and organic growth opportunities and returns it sees in the fleet management space, it believes its shareholders will be best served by rebalancing the company's allocation of capital in favor of that business.
Element's deal with GE transformed the Canadian company into North America's largest fleet provider. The business finances and manages vehicles of companies that own vast fleets for sales staff, technicians and others on the move. GE sold its Canadian fleet unit to Element in 2013.
Its Canadian C&V business, which has over 100 employees, oversees a diversified portfolio of about C$1 billion in finance assets. (Reporting by Euan Rocha; Editing by Chizu Nomiyama)
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