Cendant Corporation
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Cendant Corporation was an American provider of business and consumer services, primarily within the real estate and travel industries. In 2005 and 2006, it broke up and spun off or sold its constituent businesses. Although it was based in
New York City New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...
, the majority of its headquarters employees were in Parsippany-Troy Hills, New Jersey. Its last CEO was Henry Silverman.


History


Founding

Hospitality Franchise Systems Inc. (HFS) was created as an affiliate of the
Blackstone Group Blackstone Inc. is an American alternative investment management company based in New York City. It was founded in 1985 as a mergers and acquisitions firm by Peter Peterson and Stephen Schwarzman, who had previously worked together at Lehman ...
, a
private equity Private equity (PE) is stock in a private company that does not offer stock to the general public; instead it is offered to specialized investment funds and limited partnerships that take an active role in the management and structuring of the co ...
firm, as a vehicle to acquire hotel franchises. It was led by Henry Silverman, a Blackstone partner and former CEO of
Days Inn Days Inn is a hotel chain headquartered in the United States. It was founded in 1970 by Cecil B. Day, who opened the first location in Tybee Island, Georgia. The brand is now a part of the Wyndham Hotels and Resorts, headquartered in Parsippany ...
. It began in 1990 by buying
Howard Johnson's Howard Johnson by Wyndham, still commonly referred to as Howard Johnson's, is an American hotel brand with over 200 hotels in 15 countries. It was also formerly a Chain store, restaurant chain, which at one time was the largest in the U.S., wit ...
and the U.S. rights to the
Ramada Ramada is a large American multinational hotel chain owned by Wyndham Hotels & Resorts. As of December 31, 2022, it operates 851 hotels with 120,344 rooms across 63 countries under the Ramada brand. Name The ''Ramada'' name derives from th ...
brand from Prime Motor Inns for $170 million. In 1992, HFS bought the Days Inn franchise out of bankruptcy for $290 million. This purchase made HFS the largest hotel franchisor in the world, with its brands licensed to 2,300 hotels. Blackstone took Hospitality Franchise Systems public in a December 1992
IPO An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...
. HFS was among the fastest growing companies of its size in the 1990s and the company's stock rose from its IPO price of $4 per share to $77 per share in 1998. In 1993, HFS purchased the Super 8 brand, franchised to 1,000 motels, for $125 million, and bought the 61-hotel Park Inn brand. The company made a brief foray into the casino industry, but then spun off that business in November 1994 as
National Gaming Chartwell Leisure was an American hotel company. It was formed in 1994 as National Gaming, a spin-off of the gambling, gaming businesses of Hospitality Franchise Systems (HFS). A year later, after finding little success, the company said it was lea ...
. In 1995, HFS launched a new hotel brand, Wingate Inn. After company management found that they had mostly exhausted the field of desirable acquisition targets in the hotel industry, Hospitality Franchise Systems expanded into the real estate business. Silverman hoped that HFS's skills at franchise management would bring success in fields outside of hospitality. In August 1995, it acquired Century 21, a franchised chain of brokerages, from
MetLife MetLife, Inc. is the Holding company, holding corporation for the Metropolitan Life Insurance Company (MLIC), better known as MetLife, and its affiliates. MetLife is among the largest global providers of insurance, Annuity (US financial produ ...
for $200 million. The company changed its name to HFS Inc. the same month, to reflect its broadened scope. This was followed the next year with the acquisition of Electronic Realty Associates for $37 million, and
Coldwell Banker Coldwell Banker Real Estate LLC is an American real estate franchise owned by Anywhere Real Estate, with headquarters in Madison, New Jersey. It was founded in 1906 in San Francisco, and has approximately 3000 offices in 49 countries and terri ...
for $740 million, making HFS the largest franchisor of real estate brokerages in the U.S. In 1996, HFS acquired the Avis car rental company for $793 million. In keeping with HFS's strategy of being primarily a franchisor, it kept ownership of the Avis brand name and reservations system, while selling off the operations of Avis's corporate-owned locations as a new company, Avis Rent a Car, Inc. HFS also bought
Resort Condominiums International RCI (formerly Group RCI and, before that, Resort Condominiums International) is a timeshare exchange company with over 4,300 affiliated resorts in 100 countries. Founded in Indiana in 1974 by Jon and Christel DeHaan, RCI is one of the two main ...
, a
timeshare A timeshare (sometimes called a vacation ownership or vacation club) is a Real property, property with a divided form of ownership or use rights. These properties are typically resort Condominium (living space), condominium units, in which mul ...
exchange service, for up to $825 million. In 1997, HFS acquired PHH Corp. for $1.8 billion. PHH's businesses of mortgage brokerage,
relocation services Relocation services, employee relocation, military permanent change of station (PCS) or workforce mobility include a range of internal business processes to transfer employees, their families, and/or entire departments of a business to a new loc ...
, and fleet management were expected to synergize with HFS's real estate and car rental businesses. However, later that year, Silverman led HFS into what would prove a disastrous merger with
CUC International CUC (Comp-U-Card) International Inc. was a membership-based consumer services conglomerate with travel, shopping, auto, dining, home improvement and financial services offered to more than 60 million customers worldwide based in Stamford, Connect ...
, a direct marketing company that operated discount membership programs like Shoppers Advantage and Travelers Advantage. HFS and CUC combined in a "merger of equals" on December 18, 1997, to form Cendant Corporation. As part of the merger, Silverman announced he would reduce his day-to-day involvement with the company and assume the company's chairmanship in preference of CUC's founder and CEO Walter Forbes. In January 1998, Cendant purchased
Jackson Hewitt Jackson Hewitt Tax Service Inc. is the second largest tax-preparation service in the United States; responsible for preparing over 2 million federal, state, and local income-tax returns each year. The headquarters is located in Jersey City ...
, a franchised chain of
tax preparation Tax preparation is the process of preparing Tax return (United States), tax returns, often income tax returns, often for a person other than the taxpayer, and generally for compensation. Tax preparation may be done by the taxpayer with or without t ...
offices, for $480 million.


Accounting scandal

Just months after the merger, in April 1998 Cendant uncovered massive accounting improprieties at CUC which resulted in one of the largest financial scandals of the 1990s. At the time, Vice Chairman E. Kirk Shelton was reported to have inflated the company's revenue by $500 million over a period of three years. He had reported a 1997 net income of $55.4 million when the true 1997 result was a net loss of $217.2 million. As these irregularities in the books of Cendant were discovered in early 1998, an audit committee set up by Cendant's Board of Directors launched an investigation and discovered that the former management team of CUC, including its top executives Walter Forbes and Kirk Shelton, had been fraudulently preparing false business statements for several years. When this report was released to the public, the resulting damage to the market value for the company was approximately $14 billion, with their stock tumbling from a high of $41 down to nearly $12. At the time, this fiasco was the largest case of accounting fraud in the country's history. After the accounting scandal was uncovered, Silverman and the Cendant board forced Forbes’ resignation and Silverman assumed the CEO post. In March 2001, Forbes and Shelton were indicted by a federal grand jury and sued by the Securities and Exchange Commission, which accused the company of directing the massive accounting fraud that ultimately cost the company and its investors billions of dollars. Shelton served 8 of his 10-year prison sentence before being released early for exemplary behavior. Former CEO Walter Forbes was sentenced to 12 years in prison in 2007. Under Silverman, Cendant bounced back from the accounting scandal far outperforming the markets in the early 2000s.


Post-scandal

Following the fraud debacle, Cendant began selling businesses to reduce its debt and repair the financial damage caused by the accounting scandal. In 1998 the company sold Hebdo Mag, a publisher of classified advertising publications, for $450 million to a
management buyout A management buyout (MBO) is a form of acquisition in which a company's existing managers acquire a large part, or all, of the company, whether from a parent company or individual. Management- and/or leveraged buyouts became noted phenomena of 19 ...
group. In 1999 it sold its consumer software division, Cendant Software (consisting of
Blizzard Entertainment Blizzard Entertainment, Inc. is an American video game developer and Video game publisher, publisher based in Irvine, California, and a subsidiary of Activision Blizzard. Originally founded in 1991, the company is best known for producing the h ...
, Davidson & Associates,
Knowledge Adventure JumpStart Games, Inc., formerly Knowledge Adventure, Inc., was an American edutainment video game company based in Torrance, California. Founded in 1991, it was acquired by Chinese holding company NetDragon Websoft in 2017. History From 1991 ...
, and
Sierra On-Line Sierra Entertainment, Inc. (formerly On-Line Systems and Sierra On-Line, Inc.) was an American video game developer and publisher founded in 1979 by Ken and Roberta Williams. The company is known for pioneering the graphic adventure game ge ...
), to French publisher
Havas Havas NV () is a French multinational corporation, multinational advertising agency, advertising and public relations company, with its registered office and head office in Puteaux, France. Havas operates in more than 100 countries. The group ...
for $770 million. By 2001, Cendant was again in acquisition mode. It re-acquired the operations of Avis Rent a Car for $937 million. It made moves towards building a major online travel portal by acquiring Galileo International for $2.9 billion, and
Cheap Tickets CheapTickets is an online Travel agency, travel services company focusing on the leisure market, offering airline tickets, hotel and vacation rentals, Car rental, rental cars, customized vacation packages, and cruise ship, cruises. CheapTickets w ...
for $425 million. It entered the timeshare sales and management business by buying Fairfield Communities for $690 million, and
Trendwest Resorts WorldMark by Wyndham (formerly Trendwest) is the developer and marketer of ''WorldMark, The Club'', a vacation ownership program. Worldmark by Wyndham is part of the Travel + Leisure Co. family of travel brands (Formerly Wyndham Worldwide and Wynd ...
for $980 million. In 2002, Cendant bought Budget Rent a Car out of bankruptcy for $110 million plus $2.8 billion in assumed debt. The combination of Budget with Avis made Cendant the second-largest car rental company in the U.S. In 2004, Cendant began a series of moves to simplify its business and focus on its core areas of real estate and travel. As part of this strategy, several non-core businesses were sold or spun off. In June 2004, Cendant sold Jackson Hewitt for $638 million through an initial public offering. In January 2005, Cendant spun off its
mortgage A mortgage loan or simply mortgage (), in civil law (legal system), civil law jurisdictions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners t ...
and fleet management businesses as PHH Corporation. The next month, Cendant sold its Wright Express division, a provider of
fleet card A fuel card or fleet card is used as a payment card most commonly for gasoline, diesel, and other fuels at gas stations. Fleet cards can also be used to pay for vehicle maintenance and expenses at the discretion of the fleet owner or manager. Mos ...
s, for $1.03 billion through an initial public offering. In October 2005, Cendant sold its marketing services division, including its membership shopping programs, to
Affinion Group CXLoyalty (formerly Affinion Group and CUC) is a private company based in Stamford, Connecticut that provides customer engagement and loyalty programs. Affinion designs, markets, and services programs that deal with customer relationships for o ...
, a vehicle of
Apollo Management Apollo Global Management, Inc. is an American Asset Management, asset management firm that primarily invests in alternative assets. , the company had $548 billion of assets under management, including $392 billion invested in credit, including ...
, for $1.8 billion. Meanwhile, proceeds from these sales were used for acquisitions to expand Cendant's core businesses. In November 2004, Cendant purchased
Orbitz Orbitz.com is a travel fare aggregator website and travel metasearch engine. The website is owned by Orbitz Worldwide, Inc., a subsidiary of Expedia Group. It is headquartered in the Citigroup Center, Chicago, Illinois. Background Origi ...
, the third-largest travel booking site in the U.S., for $1.2 billion. In December 2004, Cendant consolidated its control of the Ramada name by buying out
Marriott International Marriott International, Inc. is an American multinational corporation, multinational company that operates, franchises, and licenses lodging brands that include hotel, residential, and timeshare properties. Marriott International owns over 37 ho ...
's stake in the hotel brand. In February 2005, Cendant acquired
Ebookers Orbitz.com is a travel fare aggregator website and travel metasearch engine. The website is owned by Orbitz Worldwide, Inc., a subsidiary of Expedia Group. It is headquartered in the Citigroup Center, Chicago, Illinois. Background Origi ...
, the second-largest travel booking site in Europe, for $350 million. In April 2005, Cendant acquired Gullivers Travel Associates, a British seller of travel packages and wholesale hotel nights, for $1.1 billion. In October 2005, the company bought the Wyndham hotel brand from Blackstone for $111 million.


Breakup

On October 23, 2005, Cendant's strategy of simplification culminated in the announcement that it would split into four separate companies, focused respectively on hotels, real estate, travel services, and rental cars. Silverman said the breakup would improve shareholder value by allowing the market to better recognize the value of Cendant's component businesses. Cendant originally planned to spin off its travel services division to shareholders as a company named
Travelport Travelport Worldwide Ltd. provides distribution, technology, and payment solutions for the travel and tourism industry. It is the smallest, by revenue, of the top three global distribution systems (GDS) after Amadeus IT Group and Sabre Corporatio ...
, but on June 30, 2006, Cendant announced it would sell Travelport to Blackstone for $4.3 billion. On July 31, 2006, Cendant's real estate and hotel divisions were spun off and became separate companies under the names
Realogy Anywhere Real Estate Inc., formerly Realogy (), is an American publicly traded real estate services company. It owns and franchises several real estate brands and brokerages, and offers consumer programs, lead generation, relocation, and tit ...
and
Wyndham Worldwide Travel + Leisure Co. (formerly Wyndham Destinations, Inc., and Wyndham Worldwide Corporation) is an American timeshare company headquartered in Orlando, Florida. It develops, sells, and manages timeshare properties under several vacation owners ...
, respectively. The sale of Travelport to Blackstone was completed on August 23, 2006. This left Cendant with only its car rental business, comprising Avis, Budget Rent a Car, and Budget Truck Rental. The company retired the Cendant name and renamed itself to Avis Budget Group on September 1, 2006.


Former brands


Automobile rentals

Cendant owned the rental brands of Avis and
Budget A budget is a calculation plan, usually but not always financial plan, financial, for a defined accounting period, period, often one year or a month. A budget may include anticipated sales volumes and revenues, resource quantities including tim ...
, holding these properties in the CCRG (Cendant Car Rental Group). Avis and Budget operate a shared fleet of cars, and have the same "back end" system, but operate at different locations, offer different service levels, and have somewhat different pricing. After the Cendant name was dissolved, the car rental segment became known as Avis Budget Group and currently trades on the
NASDAQ The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...
stock exchange under the ticker symbol CAR.


Hotel franchises

These brands were spun off into
Wyndham Worldwide Travel + Leisure Co. (formerly Wyndham Destinations, Inc., and Wyndham Worldwide Corporation) is an American timeshare company headquartered in Orlando, Florida. It develops, sells, and manages timeshare properties under several vacation owners ...
. *
AmeriHost Inn AmeriHost Inn was a small chain of hotels located in the United States and Canada. The chain consisted of two- or three-story interior-corridor buildings constructed based on the company's prototype designs. Properties were usually a long, two- or ...
* Baymont Inn & Suites *
Days Inn Days Inn is a hotel chain headquartered in the United States. It was founded in 1970 by Cecil B. Day, who opened the first location in Tybee Island, Georgia. The brand is now a part of the Wyndham Hotels and Resorts, headquartered in Parsippany ...
* Days Inn China * Hawthorn Suites by Wyndham * Howard Johnson * Knights Inn (includes Villager Inn, which was merged into Knights Inn in 2004) *
Ramada Ramada is a large American multinational hotel chain owned by Wyndham Hotels & Resorts. As of December 31, 2022, it operates 851 hotels with 120,344 rooms across 63 countries under the Ramada brand. Name The ''Ramada'' name derives from th ...
* Ramada Asia-Pacific *
Super 8 Worldwide Super 8 by Wyndham, commonly known as Super 8, is an American hotel brand, being the world's largest budget hotel chain with over 2,600 locations worldwide. The chain is a subsidiary of Wyndham Hotels and Resorts. The original room cost was $8 ...
*
Travelodge Travelodge or Travelodge by Wyndham (formerly branded ''TraveLodge'') refers to several hotel chains around the world. Current operations include the United States, Canada, the United Kingdom, Spain, Ireland, New Zealand, Australia and several co ...
* Wingate Inn *
Wyndham Hotels & Resorts Wyndham Hotels & Resorts, Inc., is an American hospitality company based in Parsippany, New Jersey, United States. It describes itself as the largest hotel franchising, franchisor in the world, with 9,100 locations. The company was formed on J ...


Real estate franchises

These companies are now under the
Realogy Anywhere Real Estate Inc., formerly Realogy (), is an American publicly traded real estate services company. It owns and franchises several real estate brands and brokerages, and offers consumer programs, lead generation, relocation, and tit ...
banner. *
Century 21 Real Estate Century 21 Real Estate LLC is an American real estate agent franchise company founded in 1971. The system consists of approximately 14,000 independently owned and operated franchised broker offices in 86 countries and territories worldwide with ...
* Citi-Habitats *
Coldwell Banker Coldwell Banker Real Estate LLC is an American real estate franchise owned by Anywhere Real Estate, with headquarters in Madison, New Jersey. It was founded in 1906 in San Francisco, and has approximately 3000 offices in 49 countries and terri ...
*
Corcoran Group Corcoran Group is an American real estate firm founded in 1973 by Barbara Corcoran. History Barbara Corcoran, a former diner waitress, founded her own real estate company in 1973 with a $1,000 loan. In 2001, Barbara Corcoran sold her company ...
* ERA Real Estate * NRT *
Sotheby's International Realty Sotheby’s International Realty is a luxury real estate brand founded in 1976 by Sotheby's fine art dealers. Sotheby's International Realty operates as a franchise focusing on brokering and marketing of residential real estate. As of 2018, th ...


Membership programs

These companies are now under the
Affinion Group CXLoyalty (formerly Affinion Group and CUC) is a private company based in Stamford, Connecticut that provides customer engagement and loyalty programs. Affinion designs, markets, and services programs that deal with customer relationships for o ...
banner. *
CUC International CUC (Comp-U-Card) International Inc. was a membership-based consumer services conglomerate with travel, shopping, auto, dining, home improvement and financial services offered to more than 60 million customers worldwide based in Stamford, Connect ...
(Comp-U-Card) *Shopper's Advantage *AutoVantage *Traveler's Advantage *Buyer's Advantage *NetMarket *PrivacyGuard


Travel services

These brands were separated into a new company called
Travelport Travelport Worldwide Ltd. provides distribution, technology, and payment solutions for the travel and tourism industry. It is the smallest, by revenue, of the top three global distribution systems (GDS) after Amadeus IT Group and Sabre Corporatio ...
. *
CheapTickets CheapTickets is an online travel services company focusing on the leisure market, offering airline tickets, hotel and vacation rentals, rental cars, customized vacation packages, and cruises. CheapTickets was a wholly owned subsidiary of Orb ...
* TripRewards * HotelClub.com * AoYou.com * RatesToGo.com *
Galileo CRS Galileo is a computer reservations system (CRS) owned by Travelport. As of 2000, it had a 26.4% share of worldwide CRS airline bookings. In addition to airline reservations, the Galileo CRS is also used to book train travel, cruises, car rental, a ...
*
Orbitz Orbitz.com is a travel fare aggregator website and travel metasearch engine. The website is owned by Orbitz Worldwide, Inc., a subsidiary of Expedia Group. It is headquartered in the Citigroup Center, Chicago, Illinois. Background Origi ...
*
ebookers Orbitz.com is a travel fare aggregator website and travel metasearch engine. The website is owned by Orbitz Worldwide, Inc., a subsidiary of Expedia Group. It is headquartered in the Citigroup Center, Chicago, Illinois. Background Origi ...
* Lodging.com * Asia-hotels.com * Away.com * travelbag.co.uk * OctopusTravel.com * Travelport.com * Gta-travel.com (Gullivers Travel Associates) * Trust International


Timeshare companies

These companies are owned by Wyndham Worldwide. * Fairfield Resorts *
Trendwest Resorts WorldMark by Wyndham (formerly Trendwest) is the developer and marketer of ''WorldMark, The Club'', a vacation ownership program. Worldmark by Wyndham is part of the Travel + Leisure Co. family of travel brands (Formerly Wyndham Worldwide and Wynd ...
* Shell Vacation Club


Vacation network groups

* RCI * Cuendet * Landal GreenParks * French Life * Novasol


See also

* '' Lightfoot v. Cendant Mortgage Corp.''


References


External links

{{Authority control Companies based in Morris County, New Jersey American companies established in 1996 Hospitality companies established in 1996 Companies disestablished in 2006 Parsippany-Troy Hills, New Jersey Hospitality companies disestablished in 2006 Companies formerly listed on the New York Stock Exchange