(Reuters) - Canada’s Element Financial Corp (EFN.TO) said it will split its fleet management business and its vendor and commercial financing business, creating two publicly traded companies.
The move, which comes after a strategic review, will result in Element Fleet Management operating the company’s C$19.5 billion fleet management operations, Element Financial said on Tuesday.
Element Commercial Asset Management will include the company’s C$7.0 billion commercial and vendor financing business, said Element Financial, which was valued at C$4.79 billion ($3.46 billion) as of Friday’s close.
Toronto-based Element Financial had said in October that it planned to sell its financing operations to focus on fleet management, and also said it would conduct a strategic review of its operations.
The company became one of the largest fleet providers in North America after it acquired General Electric Co’s (GE.N) fleet management business in the United States, Mexico, Australia and New Zealand for $6.9 billion last June.
Element Financial finances and manages vehicles of companies that own vast fleets for sales staff, technicians and others on the move. The company had bought GE’s Canadian fleet unit in 2013.
The company’s vendor and commercial financing business oversees a portfolio of about C$3.3 billion in commercial finance assets and C$2.2 billion in commercial aviation assets.
Element Financial said its separation into two companies is expected to be completed on a tax-free basis before the end of 2016.
BMO Capital Markets, Barclays Capital and Infor Financial are advising the company through the separation process.
Reporting by Amrutha Gayathri in Bengaluru; Editing by Savio D'Souza