After the bell, Avis Budget Group (NYSE: CAR) reported quarterly earnings. Several months ago, Avis was part of the Cendant breakup. Cendant, a poorly run conglomerate, held many different companies in a variety of industries with seemingly no synergies whatsoever. Understandably, Wall Street demanded a breakup as the company's components were discounted due to the "conglomerate discount" and operations languished due to a lack of accountability.

Today's earnings report was a perfect example of how companies are able to perform much better if operated independently for a variety of reasons -- most notably increased accountability and better incentive programs. As you can see from the chart on the right, the stock rallied very nicely following it's spin-off but has since sold off.

For the quarter, Avis earned 23 cents per share vs. a loss of 64 cents per share during the same period last year. While the company's performance came in below analyst estimates, it displays the power of the company's cost-cutting initiatives. I think the cost-cutting initiatives, alongside mediocre revenue growth, are going to power the company's earnings higher during the next several years. For example, analysts expect EPS of $1.22 this year and $1.78 next year on just 6% revenue growth.

There's been lots of dealmaking with online travel portal, Orbitz Worldwide Inc. (NYSE: OWW). Back in 2003, the company went public, and then a year later sold out to Cendant. Cendant then meshed its online travel properties into a new unit, called Travelport, which was then sold to the Blackstone Group (NYSE: BX).

And the dealmaking continued this week as Orbtiz raised a cool $510 million in an IPO. Unfortunately, investors were not impressed. The IPO was priced at $15, which was below its $16-$18 range. The stock then fell 3.3% on its first day of trading.

But the IPO proceeds won't go to Orbtiz. Rather, the cash will flow back to the parent company, Travelport (in a special dividend). In other words, the IPO is really a cash-out -- not a way to help build Orbitz.

True, Orbitz has some nice brands – such as CheapTickets.com and eBookers.com. But the fact is that the online travel space is highly competitive, with players like Expedia Inc. (NASDAQ: EXPE) and Priceline.com Inc. (NASDAQ: PCLN).

Another big issue: the company has never posted net income. So, I can understand why Wall Street has some concerns.

Also check out some of the other IPOs of the past week.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

See also:
Jonathan Berr: The appeal of Expedia and Orbitz eludes me
Tom Taulli: Blackstone wants payback with Orbitz IPO

Haven't heard of Realogy? Well, you probably have heard of its marquee brands, such as Century 21, Coldwell Banker, and Corcoran Group. In fact, the company is the largest residential brokerage in the US. It was crated during the break-up of another company, Cendant.

OK, so who would want to buy into the residential real estate business?

Of course, it's the private equity crowd. Apollo Management has agreed to shell-out $6.6 billion for the company.

The share price is $30 per share, but the stock is now trading higher. In other words, Wall Street expects a higher bid, or perhaps another suitor to come to the table.

Henry Silverman is the CEO of Realogy. During the 1980s, he was a private-equity dealmaker and eventually became a partner at The Blackstone Group.

Interestingly enough, in the Realogy deal, Silverman plans to cash-out his position.

Is this a sign that the long-time dealmaker thinks private equity is hitting a top?

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.

Back in late June, The Blackstone Group and Technology Crossover Ventures (TCV) shelled out about $4.3 billion to buy the travel assets of Cendant, called Travelport. The assets are extensive, including CheapTickets, Orbitz, Gullivers Travel Associates and the Galileo global distribution system (GDS), which processes airline tickets.

The goal for Blackstone/TCV: build a much larger travel distribution company.

Well, it has wasted little time. This week, the company purchased Worldspan for $1.4 billion. The company is a dominant player in the GDS space.

All in all, the deal makes a lot of sense. There should be big cost savings – as well as top-line growth opportunities (in terms of cross-selling). The combined company will have roughly $3.5 billion in revenues.

But it is still risky. After all, airlines are trying to avoid – or cut pricing – with GDSs. Of course, the Internet is a threat. What's more, there will be serious challenges in terms of integration of the complex organizations of Travelport and Worldspan (ie, both have different technology platforms).

But there were two key winners: Citigroup Venture Capital Equity Partners and Ontario Teachers' Pension Plan. These firms purchased Worldspan in 2003. And, because of the Travelport deal, they generated a tidy 250% return.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.