Apollo seeks $600M through IPO

Nearly two years after acquiring the Affinion unit of Cendant Corp., Apollo Management L.P. is spinning out Affinion Group Holdings Inc. in an initial public offering of stock expected to raise up to $600 million.
Affinion generates commissions by convincing 70 million consumers annually to sign up for products and services from more than 5,000 companies, including Bank of America Corp. and JPMorgan Chase & Co. Together, the two banks accounted for 30 percent of Affinion”™s $1.1 billion in revenue last year, when it had a $453 million loss. The company also sells a small set of insurance products underwritten by The Hartford Financial Services Group Inc. and other carriers.
Affinion traces its history to 1973 when it was founded as Comp-U-Card of America Inc. (CUC), taking the Cendant name following CUC”™s 1997 merger with HFS Inc.
Apollo Management spent $1.8 billion for Affinion in October 2005, when Cendant split into four separate companies, including Parsippany, N.J.-based Realogy Corp. and its Cartus division in Danbury that assists corporations in relocating their operations. In April, Apollo reached an $8.5 billion agreement to acquire Realogy, which also is the corporate parent of Coldwell Banker Residential Brokerage, the largest real estate brokerage firm in Fairfield County.
CEO Nathaniel Lipman has led Affinion and its predecessor businesses since 2002, and at last report held 1 percent of the company”™s stock. Before joining Cendant in 1999, Lipman held planning and legal roles with Planet Hollywood, House of Blues Entertainment and Walt Disney Co.
As of March, the company employed 3,000 people, some 400 at its 115,000-square-foot Norwalk headquarters. The company has pared 2,100 positions in the past five years through layoffs and outsourcing.
Still, according to Affinion”™s landlord, the company has been actively shopping for larger quarters than the space it currently occupies at 100 Connecticut Ave. in Norwalk. Affinion has confirmed it hired a commercial broker to explore alternate sites due to water drainage problems in the area.
Two of Affinion”™s primary competitors are also based in Norwalk: Vertrue Inc., which itself is undergoing a buyout led by Westport-based Oak Investment Partners and two other private equity firms; and Webloyalty.com Inc., whose chief executive officer worked earlier in his career for Affinion”™s predecessor company CUC.