Avis Budget Group has agreed to acquire car sharing company, Zipcar.
The deal, which is worth approximately US$500 million in cash, is subject to approval by Zipcar’s shareholders, but is expected to be completed in spring 2013.
With a presence in 20 major cities in the North America and Europe and with a customer base of more than 760,000 members, Zipcar is the market leader in the car sharing sector. It services a mainly young client base, including students, who rent vehicles by the hour.
“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’s chairman and chief executive officer. “Avis Budget’s existing infrastructure, scale and experience with managing multiple brands make us uniquely positioned to accelerate the growth and profitability of Zipcar.”
Following the acquisition, Zipcar will operate as a subsidiary of Avis Budget, but will continue to be run by its current management team from its new Boston headquarters.
“We are delighted to announce our intention to join the Avis Budget Group family of companies, and we believe this combination is a win across the board for our members, shareholders and employees. We will be well positioned to accelerate enhancements to the Zipcar member experience with more offers and additional services as well as an expanded network of locations,” said Scott Griffith, chairman and chief executive officer of Zipcar.
Avis Budget said it expects to generate US$50-70 million in annual synergies as a result of the transaction.