Element Financial acquires PHH Arval and completes $1.4B public financing

Element Financial Corporation acquired the assets and operations of PHH Arval, PHH Corporation's North American fleet management services business, for a purchase price of US$1.4 billion in cash. Element also assumed PHH's obligations under the PHH fleet securitization programs in the US and Canada. Pursuant to the acquisition, Element added more than US$4.6 billion in total assets, thereby increasing Element's total assets to approximately $10 billion.

The PHH Arval acquisition was led by Jim Nikopoulos, Element's Vice President and General Counsel, with assistance from Blake, Cassels & Graydon LLP and Cravath Swaine & Moore LLP. The Blakes team included David Toswell, Shlomi Feiner, Paul Singh, Doug Robertson, Tom Rowe and Josh Whitford (M&A/corporate); Stephen Ashbourne, Brendan Reay, Markus Viirland, Paul Rand, Karim Amlani, Chris Barker and Christine Creighton (securitization); Debbie Salzberger and Aleksandra Petkovic (competition); Jeffrey Trossman, Chris Van Loan, Jeffrey Shafer and Ian Caines (tax); Christine Ing (outsourcing); and Caroline Helbronner, Holly Reid and Adam Ngan (employment and benefits). The Cravath team included Erik Tavzel, Aaron Gruber, Alan Grinceri, Ali Assareh and Tucker Ewing (M&A/corporate); Ralph Currey (securitization), Stephen Burns and Joel Herold (banking); Peter Barbur (antitrust) and Eric Hilfers and Audry Casusol (employment and benefits).

PHH was led by Bill Brown, General Counsel, and was represented by Kirkland & Ellis LLP with a team including Steve Fraidin, Jeffrey Symons, Stefanie Wool, Jordan Koss, Benjamin Ritzo, Jonathan Ross, Christian Ritschka and Mattias Jönsson (M&A/corporate); Bilal Sayyed (competition), Jennifer Marie Elliott, Jack Bernstein, Ashley James, John Irving, Howard Klein and Dean Bachus (employment and benefits); and by Stikeman Elliott LLP with a team including John Leopold, Claire Zikovsky, Jason Kroft and Alexandra Tremblay (M&A/corporate); Marie-Andrée Beaudry and Éric Lévesque (tax); Paul Collins and Michael Laskey (competition); Eveline Poirier, Michèle Robichaud, Bruce Pollock, Luc Vaillancourt and Lyle Teichman (employment and benefits); David Massé (securities), Myriam Fortin (environment), Howard Rosenoff (financing), Jonathan Auerbach (intellectual property), Neil Bindman and Marie-Claude David (real estate); and David Elder (privacy). On securitization matters, PHH was represented by White & Case LLP in the US with a team including Charles Pesant, John Donovan and Anastasiya Lisovskaya; and by Blake, Cassels & Graydon LLP in Canada with a team including Gail Lilley, Mark Selick and Auriol Marasco.

Simpson Thacher & Bartlett LLP with a team including Laura Palma and Michael Guo, represented JPMorgan Chase Bank, N.A., as the administrative agent, and the lenders under the securitization program in the United States.

To finance a portion of the purchase price for the acquisition, Element raised $1.43 billion in the capital markets through the issuance of $949 million of subscription receipts at $12.75 per subscription receipt (exchangeable for Element common shares), $345 million aggregate principal amount of extendible convertible debentures and $133 million of rate reset preferred shares series E.  A Blakes team including David Toswell, Mark Adkins, Michael Hickey, Jamie Kariya, Chris Salamon, Jacob Gofman and David Colman represented Element on the offering. The underwriting syndicate was represented by Perry Dellelce, Rob Wortzman, Jeff Hergott, Mack Hosseinian and Amanda Berloni of Wildeboer Dellelce LLP.

In connection with the acquisition, Element established a new $1.5 billion amended and restated senior credit facility. Blakes advised Element on the credit facility with a team including Peter MacGowan and Niki Khatami, with Dechert LLP with a team including Malcolm Doris and Kira Brereton, who representing Element in the US. Dennis Wiebe, Kori Williams and Kiran Bains of Dentons Canada LLP and David Ciancuillo, Megan Okun and Vanessa Gage of Mayer Brown LLP represented the lenders under the facility.

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Lawyer(s)

Marie-Claude David Jeffrey Shafer Deborah Salzberger Jeffrey C. Trossman Marie-Andrée Beaudry Thomas Rowe John W. Leopold Howard Rosenoff Christine Ing Perry N. Dellelce Aleksandra Petkovic Paul Collins David J. Toswell Chris Salamon Michèle Robichaud Holly Reid Peter MacGowan David B. Elder Mark R. T. Adkins Markus Viirland Christopher R.J. Van Loan Robert D. Wortzman Claire Zikovsky Bruce R. Pollock Dennis R. Wiebe Éric Lévesque Jeff Hergott David Massé Mark J. Selick Jonathan N. Auerbach Jason Kroft Michael Hickey Shlomi Feiner Paul Rand Douglas Robertson Eveline Poirier Auriol Marasco Kori Williams Paul Singh Gail Lilley Brendan D. Reay Jim Nikopoulos Caroline Helbronner Jamie Kariya Myriam Fortin Michael Laskey Lyle Teichman Stephen R. Ashbourne Luc Vaillancourt

Firm(s)

Blake, Cassels & Graydon LLP Cravath, Swaine & Moore LLP Kirkland & Ellis LLP Stikeman Elliott LLP White & Case LLP Simpson Thacher & Bartlett LLP Wildeboer Dellelce LLP Dechert LLP Dentons Canada LLP Mayer Brown LLP