Catching the runoff from a rival's acquisition

Carl Ortell explains some of ARI's technology at the fleet management company's office in Mount Laurel. ARI, which employs 2,800, was ranked 27th among Fortune's Top 100 Places to Work in 2014. (Akira Suwa / Staff Photographer)

The big news in the fleet management business lately was PHH Corp., headquartered in Mt. Laurel, sold its fleet management division to a Canadian company. For Automotive Resources Inc., the fleet management company which has its headquarters across Leadenhall Road from PHH, the $1.4 billion deal was good news.

"Every time someone else buys someone else, it’s good for us," ARI's president Carl A. Ortell told me during our Leadership Agenda interview published in Monday's Philadelphia Inquirer.

"When one fleet management company buys another fleet management company, it’s nothing but disruption and disgruntled customers. The acquisition is really hard and the integration is 10 times harder. We’ve been through it ourselves when we bought a major company in 1989, We’ve done a lot of acquisitions, but the last thing we’d do is buy PHH where we have a lot of everything they have.

"PHH being sold will create an opportunity for us, because long time customers of PHH will say it’s not the same company any more and they’ll look around," Ortell said.  They'll say, "`ARI’s a great company and I’ll go talk to them.'

"It has happened numerous times," Ortell said. "GE has been in our business 20, almost 30 years now. And they’ve grown predominantly through acquisition. Every time they bought somebody, [ARI would get] a lot of the runoff."

Although PHH Corp. has its headquarters across the road from ARI's, it mainly runs its mortgage business out of that building. The fleet management division, PHH Arval, was based in Maryland. The buyer, Element Financial Corp., of Toronto, employs 87 people at a small service center in Horsham. The PHH purchase gives the Canadian company its first U.S. fleet management business.