The transaction will rank Element as one of the leading equipment finance companies in North America, with the addition of more than US$4.6bn  of total assets, including more than US$4.0bn of net investment in fleet leases.

a total debt of US$3.5 billion will be assumed by Element, including existing Canadian and US securitization programmes.

As part of the transaction, Element will acquire the employees, systems, intellectual property, operations, offices, agreements and other assets that PHH Arval currently employs to service its North American fleet customers.

The firms added that a Transition Services Agreement between Element and PHH Corporation, under which PHH Corporation and Element will continue to provide various services to each other during the transition period, will ensure that service to those customers, suppliers and employees will not be disrupted in any way following the closing of the transaction.

‘This transformative acquisition achieves all of the strategic and financial objectives that we established when we set out to expand our domestic fleet management business into the US market,’ said Steven K Hudson, Element’s chairman and CEO. ‘It provides us with a fully integrated North American fleet management offering that complements our other three business verticals at the same time that it is accretive to our shareholders and immediately improves our capital efficiency,’ added Mr Hudson.

‘PHH Arval’s service culture is renowned in the North American fleet management industry and we are very excited about the opportunities that we see emerging from combining their operations with Element’s existing domestic fleet management business,’ said Bradley Nullmeyer, Element’s North American president.

‘We also see exceptional growth opportunities for the combined business by being able to offer a North American-wide fleet management solution to customers that we service in our other business segments’ he added.

At 31st March 2014, PHH Arval reported more than US$4.6 billion in total assets, of which US$4.0 billion represented net investment in fleet leases, and generated annual origination volumes of approximately US$1.7bn during 2013.

The transaction is expected to close on or before 31st July 2014 and is subject to customary closing conditions, including regulatory approvals, and post-closing purchase price adjustments.