NEW YORK (CNN/Money) -
Cendant Corp. said Monday it plans to purchase timeshare operator Trendwest Resorts Inc. for $894 million in an effort to continue expanding its offerings.
Shares of the New York-based real estate and travel company fell 2 percent at midday after it agreed Saturday to acquire Trendwest (TWRI: up $0.98 to $25.00, Research, Estimates), saying the acquisition would add about a penny per share to its 2002 earnings and 2 cents in 2003.
"We are very focused on growing our business internally but also externally," Henry Silverman, Cendant chairman and CEO, told CNNfn's Before Hours. "We like this business very much. We have a comparative advantage -- we can use our comparative database in order to qualify leads."
Silverman said the acquisition would boost the company's financial statements, adding cash flow and equity to its balance sheet.
Cendant (CD: down $0.44 to $18.76, Research, Estimates) plans to pay $24 per share for the company, buying 81 percent from Jeld-Wen Inc., a closely-held door and window maker, and the remaining 9 percent from other shareholders. The company also will assume $74 million in debt.
Cendant, which owns the Ramada Inn and Howard Johnson hotel chains, recently purchased two other timeshare operators, Fairfield Communities Inc. for $634.5 million and Equivest Finance Inc. for $100 million. These companies' properties were located mostly in the eastern United States, while Trendwest's 48 properties are mostly the West and in British Columbia, Mexico, Hawaii and the South Pacific.
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"...Trendwest geographically expands our footprint in the vacation ownership business by giving us a strong presence in the western United States and Asia-Pacific regions," Stephen Holmes, chairman of Cendant's hospitality division, said in a statement.
The company also has been expanding into other travel-related areas; last year it bought travel reservation companies Cheap Tickets Inc. and Galileo Inc.
"Some of the benefits of this relationship include access to new distribution channels and customers," Bill Peare, president and CEO of Trendwest, said in a statement.
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