- The company is growing its business very quickly.
- Canadian company’s presence in the growing corporate-vehicle market
Recently Element Financial Corporation (EFN), from an asset base of $1.5 billion in 2013, Element has transformed itself through organic growth and a series of key acquisitions. The main catalyst in Element’s evolution was its acquisition of PHH Arval in July, 2014 which added over $5.5 billion in assets to the company’s balance sheet and gave it an opportunity to be able to fund more asset types for their customers Element's total assets now exceed $12.5 billion.
Recently the company bought General Electric Capital (GE)'s vehicle fleet management in the U.S., Mexico, Australia and New Zealand for $8.6 billion in cash.
This is the second operation from the Canadian company with GE. Before in June, 2013, Element acquired the Canadian operations of GE Capital's North American fleet management business.
Which is Element Financial Corp.'s long-term vision in the North American market and where it wants to be?
On closing of the deal, the Element-Arval Global Alliance will be capable of managing customer’s fleets in more than 40 countries. This deal gives an opportunity to Element to expand its global fleet management business and to have best business in systems and technologies and will make the Canadian company the biggest vehicle-fleet leasing company in the U.S. Also the added heft will give Element greater purchasing power to buy vehicles at lower prices, allowing it to offer cost savings to potential customers who would face higher costs by owning their own vehicle fleets and adding this very high-quality business to the existing fleet operations will transform the Canadian company into North America's largest fleet provider.
Element Financial Corp is mainly interested in the North American portion of GE's fleet-management unit and it really needs it for its further growth.
Recently the company reported strong Q1 results with financial revenues increase of $11 million, generating net financial income increase of $8 million.
The company’s tangible leverage ratio was 3.91 as of March 31, 2015 compared to $1.81 as of March 31, 2014 and expects this leverage ratio to continue to increase through 2016, as the capital structure is optimized in terms of the mix of investment grade debt and equity also as look for the end of 2015, they expect total earning asset of more than $15 billion and total debt of $13.4 billion. The company forecast 6.0 percent growth by the end of 2015 of course after closing the transaction at the end of the fourth quarter, Element's combined fleet management operations will include more than one million vehicles under contract and net earnings of more than $13 billion.
The company now is having benefits from its organic earnings growth by the use of a strong U.S. economy, low oil prices, a weak Canadian dollar and also its exceptional management that has been able to build a strong financial situation and to take the right actions to drive the business.
In the end it seems this deal with GE is a significant boost for Element as one of France’s largest banks, BNP Paribas (BNP, Financial) said the two deals with GE Capital would broaden the reach of the Element-Arval Global Alliance, set to manage 3 million vehicles in about 40 countries.
About Element Financial Corporation:
It is an independent financial services company that originates, co-invests in and manages asset-based financings with operations in Canada and the United States. The company operates in four business verticals: Commercial and Vendor Finance, Aviation Finance, Fleet Management and Rail Finance