As reported on TechCrunch.
by ALEXIA TSOTSIS
Car rental company Avis has announced its intent to scoop up ridesharing company Zipcar for $500 million, with the acquisition expecting to close in the Spring of 2013 according to a press release. Zipcar went public in April of 2011.
“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,” said Avis CEO Ronald L. Nelson in the announcement.
ZipCar began the morning of its IPO trading at $18 a share and its stock eventually popped to $27.96 that day, a rise of over 50%. By the end of trading it was a billion dollar company, at more than 2x the value of what it was acquired for today.
Since its IPO, the company, which has over 760,000 members in 20 different cities in the United States, the UK and Canada and is profitable, has seen less than favorable stock performance. Today’s acquisition is at a 49% premium over its closing price on December 31, 2012. Avis expects that the merger will $50 to $70 million in annual savings including the expensive process of maintaining and financing its fleet life cycle.
After the acquisition closes in the spring, the Zipcar team will continue its planned move to Boston, Massachusetts, and Avis expects that ZipCar CEO Scott Griffith and COO will stay on to run the new Avis/ZipCar subsidiary.
