Cendant Corp. to buy Fairfield Communities Inc. for 1.48 times revenue, The

Weekly Corporate Growth Report, Nov 20, 2000

The Deal: The Cendant Corp. has agreed to purchase Fairfield Communities Inc. for $728.5 million in cash and stock. According to the terms of the deal, Cendant will also assume $93.5 million of Fairfield debt. After the news of the transaction was announced, shares of Cendant rose 6 cents to $12.19, while Fairfield shares slid up 88 cents to close at $14.00.

Discussion: Fairfield Communities Inc. operates 33 resorts in 12 states and the Bahamas that offer oceanfront access, mountain views and other holiday accoutrements. Nearly 300,000 people own a piece of the property at the firm, which caters to vacation ownership interest customers. Participants buy points and can apply them toward the purchase of time at any of Fairfield's resorts. Members also can share time at more than 2,500 other resorts through Fairfield's affiliation with other resort owners. The firm has six more properties under development in Arizona, Colorado, Florida, Nevada and Tennessee.

The Cendant Corp. is the world's biggest hotel franchisor with more than 6,000 locations. Its brands include AmeriHost Inn, Days Inn, Howard Johnson, Ramada and Super 8. Cendant also franchises some 4,200 Avis car rental locations. The company's Cendant Real Estate Franchise Group includes franchised brokerages like Century 21 and Coldwell Banker. It also provides mortgage services and corporate relocation. Cendant also owns Jackson Hewitt and is spinning off its direct marketing and membership services operations.