Cendant

Cendant Corporation

Company type	Public
Industry	Business and consumer services (real estate, travel)
Founded	1990
Founder	Henry Silverman
Defunct	2006
Fate	Split into four specialized entities; rebranded as Avis Budget Group
Headquarters	New York City , United States
Area served	United States, international
Key people	Henry Silverman (last CEO)
Products	Hotel franchises, real estate franchises, car rentals, travel services

Cendant Corporation was a United States-based company specializing in business and consumer services, primarily within the real estate and travel sectors. Its headquarters were located in New York City, with the majority of its workforce operating out of Parsippany-Troy Hills, New Jersey. The company’s last chief executive officer was Henry Silverman.

Origins

Hospitality Franchise Systems Inc. (HFS) was established in 1990 by Henry Silverman, who previously served as a partner at Blackstone Group and CEO of Days Inn. The company was created to acquire hotel franchise businesses, initially purchasing Howard Johnson's and the U.S. franchise rights to Ramada for $170 million. In 1992, HFS acquired the Days Inn franchise for $290 million, positioning itself as the world’s largest hotel franchisor with 2,300 licensed properties.

Blackstone took HFS public through an initial public offering (IPO) in December 1992. The stock price surged from $4 at IPO to $77 by 1998, reflecting rapid expansion.

In 1993, HFS grew its portfolio by acquiring the Super 8 motel chain for $125 million along with the Park Inn brand. After spinning off its casino operations as National Gaming in 1994, HFS introduced the Wingate Inn brand in 1995.

With limited opportunities for further hotel acquisitions, HFS diversified into real estate franchising. In 1995, it purchased Century 21 from MetLife for $200 million and rebranded itself as HFS Inc.. The following year, it expanded further by acquiring Electronic Realty Associates for $37 million and Coldwell Banker for $740 million, becoming the largest real estate brokerage franchisor in the U.S.

In 1996, HFS added Avis car rental to its holdings for $793 million, keeping control of the brand while divesting corporate operations to align with its franchise-based business model. The company also acquired Resort Condominiums International for up to $825 million.

In 1997, HFS acquired PHH Corp. for $1.8 billion to integrate mortgage brokerage, relocation services, and fleet management into its existing real estate and rental businesses.

Later that year, HFS merged with direct marketing firm CUC International in a $10.9 billion "merger of equals," creating Cendant Corporation. Following the merger, Silverman became chairman while Walter Forbes, founder of CUC, assumed the role of CEO.

In January 1998, Cendant broadened its consumer services portfolio by purchasing Jackson Hewitt tax preparation for $480 million.

Financial scandal

Shortly after the merger, in April 1998, Cendant revealed a major accounting fraud within CUC International—one of the most significant financial scandals of the decade. Vice Chairman E. Kirk Shelton had overstated revenues by $500 million over three years. While reported net income for 1997 was $55.4 million, the actual figure was a net loss of $217.2 million. An audit committee determined that former CUC executives including Walter Forbes and Shelton had falsified financial reports over multiple years. This scandal erased roughly $14 billion from Cendant’s market capitalization as shares dropped from $41 to nearly $12—a record-setting accounting fraud case in U.S. history at that time. Following these events, Forbes resigned and Silverman took over as CEO.

In 2001, both Forbes and Shelton were indicted and sued by the SEC for their roles in defrauding investors out of billions. Shelton served eight years of a ten-year prison term; Forbes was sentenced to twelve years in 2007. Under Silverman’s leadership, Cendant experienced a strong recovery throughout the early 2000s.

Post-scandal Developments

Following the scandal, Cendant undertook asset sales to lower its debt and improve its financial condition. In 1998, it divested Hebdo Mag for $450 million and sold its consumer software division—comprising Blizzard Entertainment and Sierra On-Line—to Havas for $770 million. By 2001, Cendant resumed its acquisition strategy: it repurchased Avis Rent a Car for $937 million, acquired Galileo International for $2.9 billion, Cheap Tickets for $425 million, Fairfield Communities for $690 million, Trendwest Resorts for $980 million, and purchased Budget Rent a Car out of bankruptcy for $110 million plus assumed liabilities—thereby becoming the second-largest car rental company in the United States.

In 2004, Cendant concentrated on its principal real estate and travel sectors by divesting non-essential units through sales or spin-offs. Jackson Hewitt was taken public via an IPO valued at $638 million; mortgage and fleet management operations were spun off as PHH Corporation; Wright Express went public with a valuation of $1.03 billion; and marketing services were sold to Affinion Group for $1.8 billion.

The capital generated was deployed to finance key acquisitions: Orbitz was purchased for $1.2 billion in 2004; full ownership of Ramada was secured by acquiring Marriott’s share; Ebookers in Europe was acquired for $350 million; Gullivers Travel Associates was bought for $1.1 billion; and the Wyndham hotel brand was acquired from Blackstone for $111 million in 2005. These strategic moves bolstered Cendant’s presence in travel services and hospitality while optimizing its corporate structure to enhance growth and financial outcomes.

Corporate Separation

On October 23, 2005, Cendant revealed plans to split into four specialized entities focusing on hotels, real estate, travel services, and car rentals. This restructuring aimed to unlock shareholder value by providing clearer market visibility into each distinct business area.

Initially intending to spin off its travel services segment as Travelport, Cendant instead sold this division to Blackstone for $4.3 billion on June 30, 2006. Subsequently, on July 31, 2006, the company spun off its real estate and hotel operations as Realogy and Wyndham Worldwide, respectively.

The Travelport transaction finalized on August 23, 2006, leaving Cendant solely with its car rental businesses—Avis, Budget Rent a Car, and Budget Truck Rental. Following this change, the company retired the Cendant brand and rebranded as Avis Budget Group on September 1, 2006.

Car Rental Operations

Within the Cendant Car Rental Group (CCRG), the company owned Avis and Budget rental brands. While sharing fleet resources and backend systems, Avis and Budget differed in their geographic presence, service offerings, and pricing strategies. After Cendant’s breakup, this segment evolved into Avis Budget Group, which is publicly traded on NASDAQ under the symbol CAR.

Hotel Franchise Brands

The following hotel franchises were spun off into Wyndham Worldwide:

• AmeriHost Inn
• Baymont Inn & Suites
• Days Inn (including Days Inn China)
• Hawthorn Suites by Wyndham
• Howard Johnson
• Knights Inn (which merged with Villager Inn in 2004)
• Ramada (including Ramada Asia-Pacific)
• Super 8 Worldwide
• Travelodge
• Wingate Inn
• Wyndham Hotels & Resorts

Real Estate Franchise Brands

Currently operating under the Realogy brand:

• Century 21 Real Estate
• Citi-Habitats
• Coldwell Banker
• Corcoran Group
• ERA Real Estate
• NRT
• Sotheby's International Realty

Membership programs

These initiatives have been integrated into Affinion Group:

• CUC International (Comp-U-Card)
• Shopper's Advantage
• AutoVantage
• Traveler's Advantage
• Buyer's Advantage
• NetMarket
• PrivacyGuard

Travel services

Now part of Travelport, the following brands are included:

• CheapTickets
• TripRewards
• HotelClub.com
• AoYou.com
• RatesToGo.com
• Galileo CRS
• Orbitz
• ebookers
• Lodging.com
• Asia-hotels.com
• Away.com
• travelbag.co.uk
• OctopusTravel.com
• Travelport.com
• Gta-travel.com (Gullivers Travel Associates)
• Trust International

Timeshare companies

Under the ownership of Wyndham Worldwide:

• Fairfield Resorts
• WorldMark by Wyndham (Trendwest Resorts)
• Shell Vacation Club

Vacation network groups

Comprises:

• RCI
• Cuendet
• Landal GreenParks
• French Life
• Novasol