is adding to its
portfolio of travel businesses with a $1.1 billion cash purchase of
Gullivers Travel Associates
The acquisition of privately held Gullivers, a wholesaler of hotels, travel packages and group tours, also includes online travel seller OctopusTravel.com. It comes just two weeks after Cendant scooped up U.K. travel site
for $404 million in cash.
In a release, Cendant said it will make additional payments to some Gullivers' shareholders should the acquired company exceed current expectations. Cendant, which expects to close the deal on April 1, forecasts the acquisition will add $230 million to $255 million to its 2005 revenue. The deal could reduce 2005 earnings by a penny a share but should increase 2006 EPS by 5 cents to 6 cents, Cendant said.
Cendant plans to fund the purchase through a previously announced initial public offering of its Wright Express unit, which is expected in February or March.
Following the news, Cendant shares were up 2 cents, or 0.9%, to $22.72.
Cendant has vast real estate and travel businesses, including the Century 21 and Coldwell Banker brands, Avis and Budget rental cars, and online travel seller