- Miller Samuel Real Estate Appraisers & Consultants - https://www.millersamuel.com -

Cendant: Parts Are Greater Than The Whole

In the sign of a trend that bigger isn’t always better, Cendant, the travel, hotels and real-estate services company will split into 4 separate companies [NYT] [1]. The Cendant name will no longer exist. The breakup will fall along the lines of their four primary businesses [WSJ] [2]:


*Real Estate: Brands include Corcoran, Century 21, Coldwell Banker
*Travel: Orbitz, Galileo and Cheap Tickets
*Hotels: Ramada, Howard Johnson and Days Inn
*Car-rental: Avis and Budget

While the break up will allow the company to be more nimble and responsive to market dynamics, the pace of aquisition may slow as potential targets are able to look more closely at their suitor. Don’t these sort of things seem to go in cycles?

Remember the strategies of AT&T, ITT, GM and others when conglomerates were the envy of all? The idea was to reduce share volatility by spreading out to different industries to hedge against dips.

The break up will allow each entity to more fully realize their potential, especially real estate, which has posted strong earnings but has been overshadowed by the other seemingly weaker divisions.