Automotive Fleet, March 2016

AUTOMOTIVE FLEET I MARCH 2016 34 The two publicly traded companies will include a 195 billion fleet management company and a 7 billion North American commercial finance company BY MIKE ANTICH With total owned and managed assets in excess of 26 billion Element Financial Corporation is one of North Americas leading fleet management and equipment finance companies On Feb 16 2016 Element Financial Corp announced that its Board of Directors approved plans to separate the current business into two publicly traded companies a 195 billion fleet management company Element Fleet Management and a 7 billion North American commercial finance company Element Commercial Asset Management As separate companies each of these businesses will be able to devote 100 percent of its resources on developing its core business and serving its customers without distraction from its core mission said Steve Hudson CEO Element Financial Corporation Brad Nullmeyer president Element Financial Corporation added that with Element Fleet Management as a separate stand alone public entity We will be able to devote 100 percent of our resources on developing our core business and accelerating the deployment of new products and services for our customers New Fleet Business Structure With approximately 2600 employees Element Fleet Management will include the companys current fleet management operations in the United States Canada Mexico Australia and New Zealand as well as its global alliance with BNP Arval Its assets will include the companys current 175 billion portfolio of fleet assets as well as the current 2 billion portfolio of rail assets which will also provide additional pre tax cash flow from this entitys core fleet business These rail assets will be managed by Element Commercial Asset Management Approximately 80 percent of the fleet management business combined 195 billion asset portfolio will be U S based Nullmeyer will be CEO of Element Fleet Management Corporate and Kristi Webb will continue as CEO of Element Fleet Management North America continuing to report to Nullmeyer Commercial Asset Business With approximately 200 employees Element Commercial Asset Management to be led by Hudson will include the North American commercial and vendor finance business and the companys aviation and rail asset management businesses Its assets will include the 33 billion portfolio of commercial finance assets as well as the 22 billion portfolio of commercial aviation assets established in June 2015 as Element Commercial Aircraft Funds ECAF which the company manages on behalf of 30 institutional investors The separation transaction that will split the company into these two publicly traded entities is expected to be completed on a tax free basis before the end of 2016 Until the separation is complete Element will continue to operate as a single company To learn how these developments will impact Element Fleet Management AF interviewed Kristi Webb CEO of Element Fleet Management North America Below are excerpts from the interview AF What are the advantages to Element Fleet Management being a stand alone company WEBB Element Fleet Management as the worlds largest publicly traded fleet management business will be able to generate higher returns as a stand alone company with increased balance sheet ratings and higher leverage that more closely approximate those that apply to comparable fleet management businesses Element Fleet Management will continue to pursue organic growth opportunities and accelerate the deployment of new products and services It will also continue to benefit WEBB Element HUDSON Element NULLMEYER Element TO SPLIT INTO TWO PUBLICLY TRADED COMPANIES