By Lisa Kerner
Charlotte, N.C., March 15 - GE Capital Solutions entered into a definitive agreement to acquire PHH Corp. in an all-cash transaction for $31.50 per share, or approximately $1.8 billion.
The deal includes a $50 million termination fee and is expected to close in the third quarter of 2007.
PHH's board of directors unanimously approved the merger and recommended its stockholders do the same.
Once the transaction is completed, shares of PHH common stock will no longer be listed on the New York Stock Exchange.
GE Capital also agreed to sell the mortgage operations of PHH to an affiliate of The Blackstone Group, a private investment firm, and retain the PHH Arval fleet management services portion of the business, according to a company news release.
"Since PHH became an independent public company on Feb. 1, 2005, the board has periodically examined various alternatives in order to serve the interests of the company's clients, employees and stockholders. After careful consideration we believe this transaction best addresses those interests. It will enable stockholders to realize the fundamental value of both businesses," non-executive chairman of the PHH board A.B. Krongard said in the release.
"We believe the integrated financing and services we offer can help customers optimize fleet performance by helping them acquire, manage and sell company vehicles," GE Capital Solutions president Richard Laxer said in the release.
"Combining with PHH will enable us to provide our customers with a greater level of service to meet their growing needs and challenges."
PHH is a Mount Laurel, N.J., outsource provider of mortgage and vehicle fleet management services.
Danbury, Conn.-based GE Capital Solutions provides leasing, lending and capital investment products and services.
| Acquirer: | GE Capital Solutions
|
| Target: | PHH Corp.
|
| Transaction value: | $1.8 billion
|
| Payment per share: | $31.50
|
| Termination fee: | $50 million
|
| Announcement date: | March 15
|
| Expected closing: | Third quarter of 2007
|
| Stock price for target: | NYSE: PHH; $27.81 on March 14
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