The transaction includes employees of the business and represents aggregate GE ending net investment (ENI) of approximately US$1.1 billion.
Linzor was founded in 2006 and currently holds investments in the financial, education, industrial, retail, and consumer finance sectors across Latin America. In 2011, Linzor acquired GE Capital’s Trailer Fleet Services business in Mexico.
“We are pleased to sell our equipment finance business in Mexico to Linzor, a leading private equity firm that we know well and is fully committed to investing and growing in the Latin American financial services industry,” said Keith Sherin, GE Capital chairman and CEO. “Linzor values our domain expertise and customer relationships, which is a testament to the hard work of our GE Capital teams in Mexico.”
As previously announced, GE is embarking on a strategy to focus on its high-value industrial businesses and is selling most GE Capital assets. GE and its Board of Directors have determined that current market conditions are favorable to pursue disposition of these assets. GE will retain the financing verticals that relate to GE’s industrial businesses.
When completed, this transaction will contribute approximately US$0.1 billion of capital to the overall target of approximately US$35 billion of dividends expected to be paid to GE under this plan (subject to regulatory approval). With the transaction, the total ENI for 2015 announced sales is about US$146 billion.
“We are pleased with the progress we are making to reach and close agreements for our businesses and assets,” concluded Sherin. “This transaction signifies our final slated sale in Mexico, but we remain committed to the market and our customers through our GECAS, EFS and Healthcare Equipment Finance businesses.”
The transaction is subject to customary regulatory and other approvals and is expected to close at the end of the first quarter of 2016. Citigroup Global Markets Inc. provided financial advice and Gibson Dunn & Crutcher LLP and Creel, García-Cuéllar, Aiza Y Enriquez, S.C. provided legal advice.
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About Linzor Capital Partners
Linzor Capital Partners (LinzorCapital.com) is a leading pan-regional private equity firm focused on the middle market in Latin America. It operates through four local offices in Santiago, Chile, Mexico City, Mexico, Bogota, Colombia and Buenos Aires, Argentina. With the closing of its third fund, LCP III, in May 2015 totaling $621 million, Linzor has raised over $1.2 billion of capital commitments since inception.
Caution Concerning Forward-Looking Statements:
This document contains "forward-looking statements" that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," or "target." Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about our announced plan to reduce the size of our financial services businesses, including expected cash and non-cash charges associated with this plan; expected income; earnings per share; revenues; organic growth; margins; cost structure; restructuring charges; cash flows; return on capital; capital expenditures, capital allocation or capital structure; dividends; and the split between Industrial and GE Capital earnings. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: obtaining (or the timing of obtaining) any required regulatory reviews or approvals or any other consents or approvals associated with our announced plan to reduce the size of our financial services businesses; our ability to complete incremental asset sales as part of that plan in a timely manner (or at all) and at the prices we have assumed; changes in law, economic and financial conditions, including interest and exchange rate volatility, commodity and equity prices and the value of financial assets, including the impact of these conditions on our ability to sell or the value of incremental assets to be sold as part of our announced plan to reduce the size of our financial services businesses as well as other aspects of that plan; the impact of conditions in the financial and credit markets on the availability and cost of GECC's funding, and GECC's exposure to counterparties; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; pending and future mortgage loan repurchase claims and other litigation claims in connection with WMC, which may affect our estimates of liability, including possible loss estimates; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the adequacy of our cash flows and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels; GECC's ability to pay dividends to GE at the planned level, which may be affected by GECC's cash flows and earnings, financial services regulation and oversight, and other factors; our ability to convert pre-order commitments/wins into orders; the price we realize on orders since commitments/wins are stated at list prices; customer actions or developments such as early aircraft retirements or reduced energy demand and other factors that may affect the level of demand and financial performance of the major industries and customers we serve; the effectiveness of our risk management framework; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation and litigation; our capital allocation plans, as such plans may change including with respect to the timing and size of share repurchases, acquisitions, joint ventures, dispositions and other strategic actions; our success in completing, including obtaining regulatory approvals for, announced transactions, such as the Appliances disposition and our announced plan and transactions to reduce the size of our financial services businesses; our success in integrating acquired businesses and operating joint ventures; our ability to realize anticipated earnings and savings from announced transactions, acquired businesses and joint ventures; the impact of potential information technology or data security breaches; and the other factors that are described in "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2014. These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
This document includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
Matt Cribbins, +1 203 373 2424, matthewg.cribbins[.]ge.com
GE Capital: Ned Reynolds, +1 203 840 5075, ned.reynolds[.]ge.com
GE: Seth Martin, +1 203 572 3567, seth.martin[.]ge.com
GE Capital Mexico: Ileana Ramírez, +52 (55) 5257 6201, ileana.ramirez[.]ge.com
GE Mexico: Andrea Negrete, +52 (55) 52576297, andrea.negrete[.]ge.com