A Mount Laurel-based mortgage solutions company announced Monday that it had completed the divestiture of its fleet management services business, earning $1.4 billion in the process.
PHH Corporation sold its PHH Arval unit to Element Financial Corporation, it said in a news release, and expects to make $821 million in net proceeds after taxes and expenses.
“Completion of the sale of our Fleet Management Services business is an important step forward for PHH,” Glen A. Messina, PHH’s president and CEO, said in the release. “We now have the financial flexibility to return significant capital to shareholders, accelerate the reduction of our unsecured debt, re-engineer our Mortgage business and pursue opportunities to improve profitability through increased scale.”
The company said its board has authorized a $450 million share buyback program, including a $200 million accelerated repurchase plan. That accelerated plan will take effect after the release of second-quarter earnings, with the remainder of the buyback taking place over the subsequent 12 months. In addition, it will redeem $170 million in senior notes in the third quarter that had been due in 2016.
On top of that, PHH said in the release, it will spend up to $200 million to revamp operations and support infrastructure, and up to $150 million on growth initiatives, both in its core mortgage operations.
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