Element Financial Corporation (TSX:EFN) entered into a definitive agreement to acquire the U.S., Mexico, Australia and New Zealand Fleet management operations of Gelco Corporation for CAD 8.6 billion in cash on June 29, 2015. In addition to the purchase of the fleet businesses, the transaction includes the transfer of the employees, systems, offices, agreements, intellectual property and other assets required to operate the acquired fleet management businesses in these jurisdictions. In a related transaction, Arval entered into a memorandum of understanding to acquire GE Capital's European fleet operations. The fleet acquisition transaction will be funded from the CAD 2.7 billion net proceeds of the offering of subscription receipts, subordinated convertible debentures and preferred shares that Element Financial closed on May 29, 2015 together with CAD 5.9 billion in debt financing underwritten by a syndicate of Canadian and international banks through a committed increase of Elements's senior credit facility to CAD 10.5 billion which will be concurrently extended for a three-year term from the date of closing. U.S.-based portion of the transaction was closed on August 31, 2015. The transaction would be funded through an CAD 8.5 billion banking facilities provided by syndicate of off-shore lenders, led by Bank of Montreal. The acquisition of GE Capital's fleet management operations in Mexico, Australia and New Zealand is expected to close on September 30, 2015, subject to customary closing conditions.

The transaction is subject to customary regulatory and other local corporate or antitrust approvals. As of July 22, 2015, the United States Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The U.S. & Mexico transaction is expected to close in the third quarter of 2015, and the Australia & New Zealand transaction in the fourth quarter of 2015 subject to the receipt of these approvals. The closing of the transaction is independent of the conclusion of GE's memorandum of understanding with Arval. The transaction will result in 20% accretion to annual EPS based on fully annualized synergies.

Barclays Capital Canada Inc., BMO Nesbitt Burns, Inc., INFOR Financial Inc. and CIBC acted as financial advisors to Element in connection with the transaction, including the structuring of the transaction between GE and BNP Paribas. David Toswell of Blake, Cassels and Graydon and Eric W. Hilfers, Edward J. Reed, Stephen M. Kessing, J. Leonard Teti II, Erik R. Tavzel, David J. Perkins, David J. Kappos, Christine A. Varney and Matthew Morreale of Cravath, Swaine and Moore, Alex Kay, Hubert Segain, Sophie Brezin, Mark Currell, Adam Charles, Hester Cooper, Thomas Mawson and Chris Theris of Herbert Smith Freehills LLP and White & Case LLP acted as legal advisors to Element Financial Corporation. J.P. Morgan Securities LLC acted as financial advisor while Jon-Paul Bernard, William Gutowitz, Marc Silberberg, Kenneth Heitner, Paul Wessel, Annemargaret Connolly, Charan Sandhu, Donald Whittaker, Jeffrey Lieberman, Thomas Goslin, James Leavy, Mariel Cruz, Jakob Deitch, Amy Reed, Richard Frye, Caroline Paige Geiger, Jennifer Britz, Joseph Reich, Scott Fryman and Eric Leventhal of Weil, Gotshal & Manges LLP acted as legal advisors to Gelco Corporation and GE. Element's in-house counsel was Jim Nikopoulos. Weil, Gotshal & Manges acted as legal advisor to Gelco and Gelco Corporation, U.S., Mexico, Australia and New Zealand Fleet Operations. Bell Gully acted as legal advisor to Element Financial. Stewart Robertson, Alison Morris, David Pratley and Nima Sedaghat of Minter Ellison acted as legal advisors for Element Financial Corporation. Minter Ellison Rudd Watts and Dentons acted as legal advisors for the lending syndicate of Element Financial Corporation. Ernst & Young acted as accountant for Element Financial. Ernst & Young acted as financial advisor for Element Financial.

Element Financial Corporation (TSX:EFN) completed the acquisition of U.S., Mexico, Australia and New Zealand Fleet management operations of Gelco Corporation on September 30, 2015.