Car sharing business Zipcar has been acquired by Avis Budget Group through a deal worth $500 million (£307 million).
Fledgling NASDAQ company Zipcar has been snapped up by car hire company Avis for a 49 per cent premium over its closing price on 31 December 2012, a year after listing on the exchange.
Zipcar works through an annual joining fee which then allows users (or ‘Zipsters’) to rent cars by the hours. The business, which has operations in the US, Canada, UK, Spain and Austria, has 760,000 members.
According to the two firms, the transaction is expected to produce $50-70 million of synergies per year.
Avis says that the car sharing market has grown to some $400 million of business in the US, and is ‘expanding rapidly’ in other cities around the world.
Ronald Nelson, Avis Budget Group chairman and CEO, comments, ‘By combining Zipcar, we will significantly increase our growth potential, both in the United States and internationally.
‘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.’
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Following the acquisition, Zipcar will operate as a subsidiary of Avis Budget Group and will continue with its planned move to new headquarters in Boston, Massachusetts.
Zipcar chairman and chief executive Scott Griffith says the car sharing company is ‘delighted’ to join up with Avis.
‘By combining Zipcar’s expertise in on-demand mobility with Avis Budget Group’s expertise in global fleet operations and vast global network, we will be able to accelerate the revolution we began in personal mobility,’ he adds.