Element Financial has $2.7 billion “war chest”

Element Financial Corporation, one of North America’s leading fleet management and equipment finance companies, has announced it has raised over $2.7 million in finance via subscription receipts, debentures and preferred shares, with the aim of funding future acquisitions.

“As we discussed on our recent first quarter conference call, the process of consolidation continues to accelerate in Element’s fleet management and railcar verticals. The proceeds from this offering, together with the available leverage capacity in our capital structure, will enable us to act on acquisition opportunities that meet our criteria for accretion and value creation for our shareholders,” said Steven Hudson, Element’s CEO.

In a statement, Element said that while the company is regularly engaged in discussions regarding possible acquisition opportunities, it has not entered into any definitive agreement for an acquisition requiring the use of the net proceeds of the latest offerings.

However, US newspaper reports suggest Element is likely to be considering buying GE’s $9 billion vehicle fleet-management business, as GE seeks to divest itself of its asset finance businesses and return to its industrial roots.

GE leases and manages 1.4 million autos and trucks, mostly in the US, for mid-sized and large companies through GE Capital Fleet Services. Customers include technology giant Hewlett-Packard.

Element bought GE Capital’s Canadian fleet business in 2013 for $560 million and entered into a Canadian- US cross-border partnership. In 2014, Element expanded by purchasing the North American fleet management business of PHH Corp., PHH Arval, for $1.4 billion.