General Electric commercial finance unit today said it has agreed to buy part of Bombardier financing division for $1.4 billion.
GE Commercial Finance will also assume $1 billion in debt and other liabilities related to the $2.2 billion business - Bombardier Capital's inventory finance division.
The deal is expected to close as early as the second quarter, GE said. Net cash proceeds on the deal will total about $825 million, Bombardier said. The price represents a gross pretax premium of $225 million over the book value of the inventory financing assets being sold.
As a result of the deal, Bombardier Capital will reduce the recorded debt and other net liabilities related to the inventory financing business by about $1.6 billion. The deal is part of Bombardier Capital's portfolio wind-down, which was begun in 2001, the company said.
It said it will continue interim financing activities, as well as the wind-down of its remaining portfolios, including railcar leasing.
The Bombardier business, which provides financing for recreational products and vehicles, boats and manufactured housing, is based in Vermont and employs 280 people.