Cendant

Cendant Corporation was a large American provider of franchised and branded business and consumer services, created in December 1997 through the merger of Hospitality Franchise Systems and CUC International. Its businesses were concentrated in hospitality, real estate brokerage, travel distribution, vacation ownership, car rental, membership programs, and related services. The company was based in New York City, although much of its headquarters workforce operated from Parsippany-Troy Hills, New Jersey. Cendant's operating model was built around acquiring recognizable consumer brands and managing them through franchising, licensing, reservations, membership, or asset-light service systems rather than owning every underlying property or outlet. The company's predecessor, Hospitality Franchise Systems, had been assembled under Henry Silverman and the Blackstone Group beginning in 1990. HFS acquired hotel franchises including Howard Johnson, Ramada, Days Inn, Super 8, Park Inn, and Wingate Inn, then expanded into real estate brokerage through Century 21, Electronic Realty Associates, and Coldwell Banker. It also acquired Avis, Resort Condominiums International, and PHH Corporation. The 1997 merger with CUC International broadened the organization into membership marketing, discount programs, consumer software, tax preparation, and other services. The merger initially appeared to create a diversified growth company, but in April 1998 Cendant disclosed extensive accounting irregularities inherited from CUC. The investigation found that reported revenues and profits had been materially overstated over several years. The revelation caused a severe collapse in Cendant's market value, forced the resignation of CUC founder Walter Forbes, and made the company one of the most prominent accounting-fraud cases of the 1990s. Vice chairman E. Kirk Shelton was later prosecuted and imprisoned. Under Silverman's leadership, Cendant recovered operationally and resumed acquisitions. It reacquired Avis operations, bought Galileo International, CheapTickets, Fairfield Communities, Trendwest Resorts, Budget Rent a Car, Orbitz, ebookers, Gullivers Travel Associates, and the Wyndham hotel brand. At the same time, it sold or separated non-core operations, including Cendant Software, Jackson Hewitt, PHH's mortgage and fleet-management businesses, Wright Express, and its membership-marketing operations. From 2004 onward, management pursued a simplification strategy focused on four principal sectors: hotels, real estate, travel services, and car rental. In October 2005 Cendant announced that these businesses would be separated into independent companies. Its hotel operations became Wyndham Worldwide, its real-estate operations became Realogy, and its travel-services operations were sold to Blackstone in 2006 for the announced price of $4.3 billion. The remaining Avis and Budget rental businesses were reorganized as Avis Budget Group, and the Cendant name was retired on September 1, 2006. Cendant therefore survives primarily as the predecessor corporate structure behind several separately operated public and private businesses rather than as an active standalone brand.

Cendant's history began with Hospitality Franchise Systems, established in 1990 as a Blackstone-affiliated vehicle for acquiring and franchising hotel brands. Under Henry Silverman, HFS purchased Howard Johnson's and the United States rights to Ramada from Prime Motor Inns, followed by Days Inn in 1992. The Days Inn acquisition made HFS the world's largest hotel franchisor at that time. HFS went public in December 1992 and continued to add hotel brands, including Super 8, Park Inn, and the newly created Wingate Inn. Having built a substantial hotel-franchising platform, HFS expanded into other industries. In 1995 it bought Century 21 and changed its name to HFS Inc. The company then acquired Electronic Realty Associates and Coldwell Banker, becoming a leading American franchisor of real-estate brokerages. In 1996 it acquired Avis while retaining the brand and reservation infrastructure and separating much of the company-owned rental operation. Resort Condominiums International added a major timeshare-exchange business. In 1997 HFS acquired PHH Corporation, whose activities included mortgage brokerage, relocation, and fleet management. The same year, HFS merged with CUC International in a transaction described as a merger of equals. The combined company adopted the name Cendant Corporation on December 18, 1997. CUC contributed membership-marketing programs and other consumer businesses, while the HFS side contributed hospitality, real estate, transportation, and leisure assets. Cendant soon added Jackson Hewitt to its portfolio. The merger was destabilized only months later when Cendant disclosed that CUC executives had falsified financial statements. The investigation concluded that revenues had been inflated by approximately $500 million over three years and that CUC's reported 1997 profit should instead have been a substantial loss. The revelation caused Cendant's share price and market capitalization to fall dramatically. Walter Forbes resigned, Silverman became chief executive, and former vice chairman E. Kirk Shelton became the principal target of subsequent criminal and civil proceedings. Shelton was later convicted and served most of a ten-year sentence. After the scandal, Cendant sold assets to reduce debt and rebuild investor confidence. It divested its classified-advertising publisher Hebdo Mag and sold Cendant Software, whose properties included Blizzard Entertainment, Davidson & Associates, Knowledge Adventure, and Sierra On-Line. By 2001, however, the company had returned to expansion. It reacquired Avis's rental operations and bought Galileo International, CheapTickets, Fairfield Communities, and Trendwest Resorts. In 2002 it acquired Budget Rent a Car out of bankruptcy, creating a very large combined car-rental platform. Cendant subsequently emphasized travel, hospitality, real estate, and vacation services while disposing of peripheral divisions. Jackson Hewitt was taken public, PHH's mortgage and fleet businesses were separated, Wright Express was floated, and the membership-marketing division was sold to Affinion Group. At the same time, Cendant acquired Orbitz, ebookers, Gullivers Travel Associates, and the Wyndham hotel brand, strengthening its travel and lodging portfolio. In October 2005 the company announced that it would split into four focused businesses. The real-estate operations became Realogy, the hotel operations became Wyndham Worldwide, and the travel-services operation was ultimately sold to Blackstone as Travelport. The remaining Avis, Budget Rent a Car, and Budget Truck Rental operations became Avis Budget Group. On September 1, 2006, the Cendant name was retired, ending the life of the conglomerate while leaving its former divisions as independent successor businesses.

• 2006

  Cendant is dissolved as a standalone name

  [1]Cendanten.wikipedia.org

  Realogy and Wyndham Worldwide are separated, Travelport is sold to Blackstone, and the remaining rental business is renamed Avis Budget Group.

• 2005

  Breakup plan announced

  [1]Cendanten.wikipedia.org

  Cendant announces that its hotel, real-estate, travel, and rental-car operations will be separated into focused companies.

• 2002

  Budget Rent a Car is acquired

  [1]Cendanten.wikipedia.org

  Cendant acquires Budget Rent a Car out of bankruptcy and combines it with Avis to create one of the largest U.S. rental-car groups.

• 1998

  Accounting scandal becomes public

  [1]Cendanten.wikipedia.org

  Cendant uncovers fraudulent financial reporting at former CUC businesses, leading to a major market-value loss and management changes.

• 1997

  Merger with CUC International creates Cendant

  [1]Cendanten.wikipedia.org

  HFS and CUC combine in a merger of equals, forming Cendant Corporation on December 18.

• 1995

  Expansion into real-estate franchising

  [1]Cendanten.wikipedia.org

  HFS acquires Century 21 and adopts the HFS name to reflect its broader business scope.

• 1992

  HFS acquires Days Inn and goes public

  [1]Cendanten.wikipedia.org

  The Days Inn acquisition makes HFS the largest hotel franchisor in the world at the time, and HFS completes an initial public offering later that year.

• 1990

  Hospitality Franchise Systems is established

  [1]Cendanten.wikipedia.org

  A Blackstone-affiliated vehicle led by Henry Silverman begins acquiring hotel franchises, starting with Howard Johnson's and the U.S. rights to Ramada.

A diversified, acquisition-driven franchising and consumer-services conglomerate. Cendant positioned itself as an asset-light owner and operator of major service brands, using franchise networks, reservations platforms, membership programs, and travel distribution systems to participate across hospitality, real estate, transportation, and leisure.

• Hospitality · 1990

  Hotel franchising

  Cendant's hotel platform consisted primarily of franchised lodging brands, including Days Inn, Ramada, Howard Johnson, Super 8, Travelodge, Knights Inn, AmeriHost Inn, Hawthorn Suites, and Wingate. The business supplied brand standards, marketing, reservation capabilities, and franchise support while independent owners operated many properties.

• Real estate services · 1995

  Real-estate brokerage franchising

  The real-estate group included Century 21, Coldwell Banker, ERA, Electronic Realty Associates, NRT, Citi-Habitats, Corcoran Group, and Sotheby's International Realty. Cendant provided franchise and network infrastructure for brokerage businesses operating under established regional and international brands.

• Car rental · 1996

  Avis and Budget rental services

  Cendant owned and managed the Avis and Budget rental brands, which used shared systems and fleet resources while maintaining distinct locations, service propositions, and pricing structures. Budget Truck Rental was also part of the remaining rental portfolio.

• Travel services · 2001

  Travel distribution platforms

  Cendant assembled a broad travel-services portfolio that included Galileo International, Orbitz, CheapTickets, ebookers, Gullivers Travel Associates, Lodging.com, and related hotel and package-booking businesses. These operations covered online booking, global distribution, wholesale hotel inventory, and travel packages.

• Timeshare and vacation services · 1996

  RCI and vacation ownership services

  RCI operated a timeshare-exchange network, while Fairfield Resorts, Trendwest Resorts, Shell Vacation Club, and related vacation networks provided ownership, exchange, resort, and holiday-accommodation services.

• Consumer membership services · 1997

  Membership and discount programs

  Inherited from CUC International, these programs included Shoppers Advantage, Travelers Advantage, AutoVantage, Buyer's Advantage, NetMarket, and PrivacyGuard. They offered members discounts, purchasing services, travel benefits, or consumer-protection products.

• 1998

  CUC accounting fraud

  Following the merger that created Cendant, an internal review found that former CUC management had fabricated or improperly reported financial results. Reported revenue had been overstated by roughly $500 million over three years, and CUC's reported 1997 profit was restated as a substantial loss. The disclosure caused a collapse in Cendant's share price and approximately $14 billion in lost market value. Walter Forbes resigned, while E. Kirk Shelton later faced federal criminal prosecution and SEC action.

  Source

Read more

• 2006

  Sale of Travelport to BlackstoneM&A

  Background

  Cendant originally considered distributing its travel-services division to shareholders but later chose a cash-generating transaction.

  Action taken

  Cendant agreed to sell Travelport to Blackstone for $4.3 billion.

  Aftermath

  The transaction closed in August 2006 and left Cendant with only its car-rental operations before the corporate name was retired.

  Transaction value. $4.3 billion announced sale value (2006)

  Source

• 2005

  Decision to separate Cendant into four businessesStrategy

  Background

  Management concluded that the conglomerate's hotel, real-estate, travel, and car-rental assets would be more clearly valued and strategically managed as separate companies.

  Action taken

  Cendant announced a plan to separate the four principal operating groups through spin-offs and a sale.

  Aftermath

  Realogy and Wyndham Worldwide were spun off, Travelport was sold to Blackstone, and the remaining rental operations became Avis Budget Group.

  Source

• 1998

  Management response to accounting scandalOther

  Background

  The discovery of fraudulent reporting at CUC threatened the newly merged company's credibility and financial standing.

  Action taken

  Cendant's board forced Walter Forbes to resign, and Henry Silverman assumed the chief executive role while the company investigated and restated its financial information.

  Aftermath

  Cendant remained intact, pursued litigation and regulatory cooperation, and later recovered through asset sales, acquisitions, and operational restructuring.

  Source

1. 1Cendanten.wikipedia.org