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1/2/13 Avis will acquire Zipcar car-sharing business for $500 million - latimes.com
1/5www.latimes.com/business/autos/la-fi-hy-avis-buys-zipcar-20130102,0,2787083.story
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January 2, 2013 , 8:25 a.m .
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Avis will acquire Zipcar car-sharing business for$500 million
52
In a bid to expand its breadth and adapt to changing
consumer habits, the Avis car rental company announced a
deal Monday to purchase car-sharing business Zipcar for
about $500 million.
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1/2/13 Avis will acquire Zipcar car-sharing business for $500 million - latimes.com
2/5www.latimes.com/business/autos/la-fi-hy-avis-buys-zipcar-20130102,0,2787083.story
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Zipcar Inc. has been growing as more people in urban areas
forgo owning a car and instead tap car-sharing and hourly
rental services when they need a vehicle. The company’s
third-quarter sales grew 15% to $78.2 million while its
membership (renters) grew 18% to more than 767,000.
Zipcar earned $4.3 million in the three-month period and has
said it expected 2012 to be the first full year for which it
posts a profit.
"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, chief executive of Avis Budget Group. “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.”
Avis Budget, the nation’s third-largest car rental company --
after Enterprise Holdings and Hertz -- will pay $12.25 a share
in cash for Zipcar, a 49% premium over the stock's closing
price Monday.
The deal is subject to approval by Zipcar shareholders and
other customary closing conditions, but owners of 32% of
Zipcar’s stock have already agreed to the transaction. It is
scheduled to be completed in the spring.
“We believe this combination is a win across the board for
our members, shareholders and employees,” said Zipcar CEO
Scott Griffith. “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."
Avis believes it can whittle $50 million to $70 million of
expenses out of the combined operations of the companies
by eliminating duplication of functions such as the cost of
maintaining Zipcar as a publicly traded company.
"Avis Budget's existing infrastructure, scale and experience
with managing multiple brands make us uniquely positioned
to accelerate the growth and profitability of Zipcar," said
Nelson.
Griffith will continue to run Zipcar’s day-to-day operations.
The car-sharing business operates in 20 major metropolitan
areas in the United States, Canada and Europe and has cars at
300 college and university campuses.
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