Boston, MA 06/03/2014 (wallstreetpr) – PHH Corporation (NYSE:PHH) based in Mount Laurel, New Jersey, the company, is a provider of business process management service for fleet service and mortgage. Its mortgage division is one of the largest in the U.S. PHH on June 2, 2014 declared that the company has signed a definitive agreement to handover its fleet management service business to Element Financial Corporation.
$140 billion transaction:
As per the report PHH will sell over its fleet management service business to Element for an approximate value of $1.40 billion. The president and Chief Executive officer of PHH Corporation (NYSE:PHH), Glen A. Messina reported that after evaluation of the strategic moves carefully, the board and management of the company believe that this would be the best possible way of maximizing the shareholder’s value. The CEO also added that the company is pleased to make such agreement with Element, which has a sturdy fleet management business.
The deal has been formed as a stock-for-cash transaction, however under the U.S. Internal revenue Code, the transaction will be judged as a sale of an asset for tax purpose. The company expects to achieve a tax gain of nearly $250 to $300 million and a net profit (after transaction and tax expenses) of nearly $750 to $800 million.
Element to acquire North America based fleet management operations:
Element will acquire all PHH Arval’s North America based fleet management services and the offices in Sparks and Maryland. These PHH’s offices will thereafter be the fleet headquarter of Element. Both the companies will provide each another transaction support.
CEO commented on company’s mortgage service:
PHH Corporation (NYSE:PHH) will continue with its mortgage service and production segment and supply end-to end mortgage solutions for the leading financial institutions. The CEO of PHH, Messina, stated that the company has taken perfect strategy and is confident to proceed with the mortgage service from now. This deal will bring financial firmness inside the company and deliver quality support henceforth.
