Avis to Acquire Zipcar for $500 Million
Avis Budget Group has announced that it will acquire Zipcar for $500 million or $12.25 per share in an all-cash transaction. The deal, a 49% premium over the closing price on December 31, 2012, will move Avis into the growing car-sharing market.
Avis, which lost out to Hertz in acquiring Dollar Thrifty, expects to generate $50 to $70 million in annual synergies and see better fleet utilization.
Zipcar went public in 2011 but, despite substantial increases in sales, it has reported a yearly net loss since its founding in 2000.
“We see car sharing as highly complementary to traditional car rental, with rapid growth potential and representing a scalable opportunity for us as a combined company,” said Avis’ CEO Ronald L. Nelson.
The deal is expected to be completed by the spring of 2013. Following the transaction, Zipcar will continue to operate as a subsidiary of Avis, with key members of the company’s management team remaining onboard.
In recent years, Zipcar has grown to be a leader in the nearly $400 million car sharing business in the United States. It has over 760,000 members or “Zipsters,” with a presence in 20 major metropolitan areas in the U.S., Canada, and Europe, as well as at over 300 college campuses.