When asked Monday what impact Hertz Global Holdings acquisition of the company will have on remarketing at Donlen Corp., executive vice president of brand and UX Suzanne Deveney said that Donlen customers will likely benefit.

“As of now, there are no changes planned in any area, including remarketing,” she told Auto Remarketing. “In fact, we are anticipating this to strengthen our remarketing offerings for our customers.”

Such sentiment appears to be one of many reasons why officials believe Hertz signing a definitive agreement to acquire Donlen will be beneficial all-around.

While Hertz had not yet responded to Auto Remarketing as of press time with regards to the remarketing impact of the deal, chairman and chief executive officer Mark Frissora — joining his counterpart over at Donlen Gary Rappeport — shared during a press conference Monday morning the various benefits of the deal.

The transaction has been approved by the boards of directors of both companies and by the stockholders of Donlen. The transaction is expected to be completed in the third quarter of 2011, subject to the satisfaction of customary closing conditions, including regulatory approvals.

Frissora said during Monday’s call that the transaction will “most likely” be wrapped up by the end of August.

Senior management at Donlen is "absolutely" sticking around, it was revealed during Monday’s call, with Rappeport expected to stay on at least a year.

The Hertz CEO delved further into the benefits of his company buying Donlen.

For instance, when asked during the call about revenue synergies between Hertz and Donlen as they pertain to corporate customers, Frissora noted: “There’s a lot of overlap, but there’s also a lot of opportunity. I’d say it’s kind of half-and half, if you would, if you look at Donlen’s customers and our customers.

“For us … there’s kind of like three areas of excitement that the teams are very engaged in and talking about,” Frissora went on to say. “The first one is going to our corporate customers and being able to offer them fleet management solutions.”

Secondly, he said, in its off-airport business, Hertz hopes to utilize the relationships that Donlen has with service providers that can help Hertz grow its off-airport business.

Third, Hertz can benefit in the equipment rental business.

“Their new products that they come out with on truck leasing — both heavy-duty and medium-duty and construction equipment  — allows us to get in the door in a lot of construction equipment sites that only have three to four year lives on them and they want leasing product instead of rental product,” Frissora noted.

“So we’re now able to offer leasing product and then the rentals that occur after you get the lease is fairly big,” he added.

Moving along, officials shared more about what Donlen brings to the table.

Donlen is primarily a vehicle financing and fleet management consulting business which deploys leading technology applications to support its customers.

Together with Donlen’s existing relationships, Hertz will now be able to significantly expand its fleet management capability to Europe and other international markets. Additionally, the Donlen acquisition provides Hertz with a strategic consulting practice in asset and fleet management with an industry leading reputation for its GreenDriver telematics initiative such as DriverPoint, which tracks and measures driver behavior and productivity, management indicated.

“The acquisition of Donlen expands our portfolio of transportation solutions by giving Hertz an immediate leadership position in long-term car, truck and equipment leasing and fleet management for corporate customers who need scale and sophisticated fleet management services,” Frissora shared. “This range of solutions from a single provider will make Hertz unique among its peers."

Frissora added: “The integration of Donlen gives Hertz a yearly and multi-year offering that complements our hourly, daily and monthly car sharing and car rental options for customers, giving us a more stable revenue stream and new adjacent markets to leverage our existing business model.”

Management noted: "The acquisition of Donlen is consistent with the evolution of Hertz’s asset-light, technology focused business model.”

Offering his perspective, Rappeport shared: “We’re thrilled to be part of the Hertz global family. There are a number of synergies between the two businesses that will allow us to expand and accelerate Donlen’s offerings and continue our passionate focus on customer service and technology. Together, Hertz and Donlen have a unique opportunity to explore and create new and innovative products to bring to market."

Both Frissora and Rappeport will be key speakers at this year’s National Remarketing Conference. To learn more or register for the premier industry event, visit http://nrc.autoremarketing.com/agenda.

Based in Northbrook, Ill., Donlen leases and manages more than 144,000 vehicles throughout the United States, Canada and Mexico. Donlen has posted consistent growth in pre-tax income since 2000, including 2008 and 2009 in the midst of the recession.

Hertz is purchasing Donlen for $250 million and will be assuming approximately $680 million of Donlen’s outstanding fleet debt. Hertz expects to refinance Donlen’s debt at improved financing terms.

Hertz believes the acquisition will be credit neutral and will strengthen its business profile given Donlen’s business mix and diversified lease portfolio. This transaction is immediately accretive to Hertz’s earnings and is EVA positive in year one. Hertz has identified $20 million of synergies, primarily fleet-related.
Hertz is being advised in this transaction by Seale & Associates Inc. and Barclays Capital. Donlen’s advisor is J.P. Morgan Securities LLC. Jenner & Block LLP is acting as mergers and acquisitions counsel to Hertz. Weil, Gotshal & Manges LLP is providing advice regarding structured finance matters. Skadden, Arps, Slate, Meagher & Flom LLP is serving as seller’s counsel on behalf of Donlen.

Auto Group Editor Jennifer Reed contributed to this report.