Rearden Commerce late last month received an additional $40 million from JPMorgan Chase's private equity arm One Equity Partners, bringing the total outside investment capital in the company to $240 million. The company also in September cut 15 percent of its more than 350-person workforce, mainly from administrative and support positions, according to vice president of worldwide sales Tony D'Astolfo.
The influx of capital combined with the layoffs comes as the company works to accelerate toward profitability and a possible initial public offering.
"Where we could, we looked at where we can cut our expenses," said D'Astolfo. "As revenue grows, expenses get reduced, and we become profitable in the next six quarters. One of the opportunities at some point in time would be to leverage the public markets in order to accelerate the growth. To do that, companies need to be in better positions financially—and that means profitability—to maximize that opportunity. That is what we are keenly focused on."
Most of Rearden's existing funding comes from American Express, Empire Capital Partners, Foundation Capital, JPMorgan, Oak Investment Partners and Palo Alto Investors. D'Astolfo said all outside investors still are minority shareholders.
In May 2008, the group of corporate, private equity and venture capital investors gave Rearden $100 million
(BTNonline, May 12, 2008). American Express first paid $22.5 million for a minority share in Rearden in 2006. Rearden's Personal Assistant is the platform for Amex's Axiom tool. Rearden also provides an online customer loyalty platform for Chase's consumer credit cardholders.
One Equity Partners managing director Greg O'Hara gained a seat on Rearden's board. OEP has been enlarging its private equity ownership in the corporate travel industry. It owns 45 percent of Carlson Wagonlit Travel
(BTNonline, April 27, 2006) and has stakes in Travel Leaders Group and Travelport. O'Hara has a seat on the boards of those companies as well.
O'Hara, no stranger to the travel industry, previously was a board member and executive vice president of corporate planning and development at Worldspan and a Sabre senior vice president of global services.