Avis acquired Zipcar for $500 million at $12.25 a share, over 49 percent over Zipcar's end-of-the-year closing price.
"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 Ronald L. Nelson, Avis Budget Group chairman and chief executive officer in a statement. "We expect to apply Avis Budget's experience and efficiencies of fleet management with Zipcar's proven, customer-friendly technology to accelerate the growth of the Zipcar brand and to provide more options for Zipsters in more places. We also expect to leverage Zipcar's technology to expand mobility solutions under the Avis and Budget brands."
Zipcar has 760,000 members in urban areas and college campuses in the United States, Canada, and Europe. With younger, more urban members, the move allows Avis to diversify its consumer base.
"By combining with Zipcar, we will significantly increase our growth potential, both in the United States and internationally, and will position our company to better serve a greater variety of consumer and commercial transportation needs," Nelson said.
Avis says the transaction is expected to lead to $50 to $70 million in annual "synergies." In November, Zipcar said it expects to see an annual profit -- of about $4 million -- for the first time.
The goal now, for Avis, will be to maintain the brand that made Zipcar so popular. Avis believes it will do that along with making the company run more efficiently.
"Avis Budget's existing infrastructure, scale and experience with managing multiple brands make us uniquely positioned to accelerate the growth and profitability of Zipcar," Nelson said. "At the same time, we are committed to retaining the elements of the Zipcar brand and culture that have allowed Zipcar to achieve such rapid growth and success over the last twelve years."
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