Carlson Companies CEO Hubert Joly has frequently referred to Carlson Marketing as "the roots of the company," and with good reason.

The business, which designs and sells loyalty, engagement and event programs for corporate clients, is a modern-day version of Gold Bond Stamps, the customer loyalty program the late Curt Carlson established as the foundation of his business empire more than 70 years ago.

Since then, Minnetonka-based Carlson has entered the hotel, restaurant and travel businesses, which combined now account for about 98 percent of its revenues.

"The tree has outgrown the roots," Joly said Tuesday.

Carlson announced Tuesday that it was selling the marketing arm to a Canadian firm in the same line of business for $175 million in cash. Joly said the sale to Groupe Aeroplan Inc. won't mean a substantially smaller Carlson.

In fact, the deal will likely allow Carlson to grow, he said.

Carlson Marketing has about 1,900 employees, about half of them in the Twin Cities. Joly said it's possible the number could increase because Groupe Aeroplan plans to use the Carlson Marketing offices here as headquarters for its U.S. operations.

Groupe Aeroplan's businesses and Carlson Marketing will continue to operate separately. Carlson Marketing will continue to be headed by its current management team, led by President and CEO Jeff Balagna.

Carlson is privately held and does not report financial results. It had revenue for 2008 of about $38 billion, although the actual amount received directly by the company is considerably less when revenue of franchisees is excluded.

Joly said he expects the sale, which should close in December, will allow Carlson to invest in and expand its other businesses. That could include renovating some hotels and expanding some hotel chains, especially its core brands: Radisson and Country Inns & Suites.

Carlson Hotels Worldwide has 1,056 locations with 158,616 rooms in 77 countries. Its other brands include Regent, Park Plaza and Park Inn hotels. Carlson Restaurants Worldwide owns, operates, franchises and licenses more than 1,000 restaurants in more than 60 countries under two brands, T.G.I. Friday's and Pick Up Stix. Carlson Wagonlit specializes in business travel management and operates in more than 150 countries.

Groupe Aeroplan got its start in the 1980s as a frequent-flier program of Air Canada. Its operations were integrated with those of Air Canada until 2002, when it was spun off. It went public in 2005.

"This acquisition is a logical extension for our company, as we diversify our business model to include a broader range of services within the loyalty management space in the U.S. and internationally," Rupert Duchesne, president and CEO of Groupe Aeroplan, said.

Susan Feyder • 612-673-1723