Five years after being carved out of the former Cendant, Affinion Group Holdings Inc. filed for a $400 million initial public offering of stock.
The move comes more than two years after Affinion tabled a previous IPO filing, at a time when few companies attempted new offerings due to market turmoil. Purchase, N.Y.-based Apollo Management L.P. will continue to hold a majority stake following an IPO.
Affinion recently moved its headquarters from Norwalk to Stamford, where it has more than 350 employees. It recently garnered international attention after the investigation of Times Square plotter Faisal Shahzad revealed the would-be terrorist worked a period at Affinion as a financial analyst.
Separately, the company announced the resignation of Thomas Rusin, head of its North American operations under CEO Nathaniel Lipman; as well as two directors, Robert Hedges Jr. who also is a managing director of the consulting firm Mercatus L.L.C., and Eric Zinterhofer, a partner in Apollo Management L.P., which owns Affinion. Affinion did not state the reasons for the directors”™ departures, except to say it was not the result of any disagreement with the company.
Affinion traces its history to the 1973 formation of Comp-U-Card of America; in 1997 it merged with HFS to form Cendant, and in 2005 was spun out of Cendant as Affinion.
Apollo also owns the Danbury-based Cendant spinout Cartus Corp., one of the largest employers in Fairfield County and a subsidiary of Parsippany, N.J.-based Realogy Corp., which Apollo controls.
Affinion helps other corporations manage customer loyalty programs via discounted products and services offered through fee-based membership clubs. Affinion lost $23.5 million in the first quarter as revenue dipped 3 percent to $334 million.
The company is adding to its product platform, reaching a $135 million deal to acquire Connexions Loyalty Travel Solutions, which provides corporate clients an online platform for consumers to redeem loyalty points by booking reservations for travel and lodgings. Connexions has 600 employees in Eden Prairie, Minn., where it is based and at offices in St. Louis and Boise, Idaho.
Along with Norwalk competitors Vertrue Inc. and Webloyalty Inc., Affinion has been under investigation by the U.S. Senate Committee on Commerce, Science, and Transportation on allegations of misleading consumers by not giving them sufficient notice of the fees they could incur.
Earlier in May, U.S. Sen. Jay Rockefeller introduced federal legislation with the stated goal of forcing Affinion, Vertrue and Webloyalty to adopt a range of consumer protection policies.
Affinion and Vertrue did not immediately issue a public statement in response to the legislation filed by Rockefeller; for its part, Webloyalty immediately issued a statement defending its business model.
“We have evolved our business practices over time based on our independent analysis as well as in response to feedback from consumers, industry groups, lawmakers and regulators,” Webloyalty stated. “We believe that the practices we adopted in January 2010 ”“ including requiring consumers to enter their full credit card information to enroll in our programs ”“ represent significant enhancements to our business practices.
“We believe that our current enrollment and post-enrollment policies and procedures meet virtually all of the requirements of the proposed legislation,” the statement continued. “We will follow closely the changes, if any, to the draft bill as it continues to develop and will ensure that our business practices comply fully with the law when enacted.”
