Hertz Global Holdings and Donlen Corporation announced they have signed a definitive agreement for Hertz to acquire Donlen, a provider of fleet leasing and management services for corporate fleets across the U.S.

Hertz is purchasing Donlen for $250 million, and will be assuming approximately $680 million of Donlen’s outstanding fleet debt. Hertz said it expects to refinance Donlen’s debt at improved financing terms. The car rental company noted that it believes the acquisition will be credit neutral and will strengthen its business profile given Donlen’s business mix and diversified lease portfolio.

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.

Commenting on the transaction, Donlen chief executive officer Gary Rappeport said, “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.”

Northbrook, IL-based Donlen has over 144,000 vehicles under lease and management and, in 2010, generated gross billings of approximately $920 million and revenues of approximately $350 million.

Hertz is being advised in this transaction by Seale & Associates and Barclays Capital and Donlen’s advisor is J.P. Morgan Securities. Jenner & Block is acting as mergers and acquisitions counsel to Hertz and Weil, Gotshal & Manges is providing advice regarding structured finance matters. Skadden, Arps, Slate, Meagher & Flom is serving as seller’s counsel on behalf of Donlen.

To read the full text of the Hertz news release: click here.