Hertz Global Holdings and Donlen Corp. this morning announced they have signed a definitive agreement for Hertz to acquire Donlen.

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.

Mark Frissora, the chairman and chief executive officer of Hertz, said, "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. 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.

"The acquisition of Donlen is consistent with the evolution of Hertz’s asset-light, technology focused business model," according to management.

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.

"We’re thrilled to be part of the Hertz global family," said Gary Rappeport, Donlen’s CEO. "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.