PHH Completes Sale Of Its Fleet Management Services Business

(RTTNews) - PHH Corp. (PHH) said Monday that it has completed the sale of its Fleet Management Services business, doing business as PHH Arval, to Element Financial Corp. for cash consideration of $1.4 billion.

The sale transaction is expected to generate $821 million in net proceeds after the payment of expected taxes and transaction expenses, subject to purchase price adjustments and the final determination of taxes. PHH's pro forma consolidated cash and cash equivalents as of March 31, 2014, inclusive of the net proceeds received at closing, was $1.74 billion.

PHH also said its Board of Directors has authorized up to $450 million in share repurchases, including a $200 million accelerated stock repurchase program, which is expected to commence after the release of the company's second quarter earnings, and up to $250 million in open market purchases over the twelve months following the completion of the ASR.

The company also plans to redeem all of its outstanding 91/4% Senior Notes due 2016, with an aggregate principal amount of $170 million, in the third quarter of 2014.

Additionally, PHH said it plans to deploy up to $200 million to re-engineer the Company's operations and support infrastructure. The company also plans to invest up to $150 million in growth initiatives to enhance scale and profitability and diversify the Company's revenue streams across Mortgage Production and Servicing.