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Cendant Plans IPO for Wright Express Unit

November 23, 2004

Cendant Corp., the New York-based parent of Avis, Budget Rent A Car, Days Inn, and other travel and real-estate businesses, said on Nov. 23 it plans to take its Wright Express unit, which provides fleet fuel management, public in March 2005. Cendant said it has filed a registration statement with the Securities and Exchange Commission and expects proceeds of more than $1 billion from the initial public offering, according to the Associated Press. The company also said it expects the previously announced spinoff of its mortgage and fleet-management operations, PHH Corp., will occur by February. In October, Cendant said the decision to spin off the unit, which will be in the form of PHH Corp. shares to Cendant stockholders, reflects the company's strategy of focusing on the travel and residential real-estate sectors. PHH, which manages a million vehicles for its clients, had combined revenue of more than $2 billion for the 12 months ended June 30, Cendant said in October. The company also said it intends to dispose of its Marketing Services unit in the third quarter of 2005. With the disposition of these business, the company said it will be able to redeploy capital to repurchase stock and grow its business. Cendant also reaffirmed its full-year earnings projection in a range of $1.70 to $1.71 a share. That's slightly below Wall Street's projection for earnings around $1.72 a share, which is the average analyst estimate in a Thomson First Call survey. For 2005, the company projected earnings of $1.35 to $1.45 a share, below analysts projections for earnings of about $1.83 a share.
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