Cendant Corp., New York, has reached an agreement to sell its auto leasing and fleet-management unit to Avis Rent a Car Inc. for $1.44 billion in cash and $360 million in convertible preferred stock. The transaction is expected to close on or about June 30.
The unit includes PHH Vehicle Management Services Corp., Cendant Business Answers (Europe) PLC, The Harpur Group Ltd. and Wright Express Corp. In 1998, the Fleet segment reported net revenues of $387.4 million.
The company will record an after-tax gain of about $750 million from the transaction. Total proceeds after taxes and expenses are estimated at $1.7 billion. Cendant said that as a result of the sale, its stake in Avis would increase from 19% to 34% over the next several years.
Cendant also said it intends to sell the following non-core assets: Central Credit, Global Refund, North American Outdoor Group, Spark Services and Numa. In the aggregate, 1998 revenues for these five business units were about $316 million.
The company said it is considering selling its Entertainment Publications, Green Flag unit and other non-core assets.
Cendant intends to use the net cash proceeds from the disposition of these assets primarily to repurchase its stock.
The company has already sold Cendant Software, Hebdo Mag, Essex, National Leisure Group and National Library of Poetry, and announced the proposed sale of Match.Com, for net proceeds of about $1.4 billion.
Cendant said the transactions will allow the company to focus on its core operations: travel, real estate, direct marketing and car rentals. Its direct marketing business includes the Netmarket Group (individual membership and insurance/wholesale) and other consumer and business services (NCP, Jackson Hewitt Tax Service and Wizcom).
Cendant, which had an accounting scandal last year that led to the departure of its chairman, has said it could raise several billion dollars in 1999 selling off businesses not core to its real estate and travel empire.
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