Zipcar, the leading car sharing service in North America, is set to be bought by car rental firm Avis Budgest group for about $500 million, which breaks down to $12.25 per share.
“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 Budget Group CEO Ronald L. Nelson.
That price represents a 49 percent premium over the closing price of Zipcar stock on December 31, 2012. Avis Budget is shifting its strategy towards shorter term car rentals, and the acquisition of Zipcar solidifies that strategic shift.
Car sharing is still growing at a rapid pace in North America, and is now a roughly $400 million business in the United States. Zipcar now has 760,000 members, spread across 20 major cities in the U.S., Canada and Europe.
Zipcar also operates fleets in 300 college and university campuses. As a result of the acquisition of Zipcar, Avis Budget says that they expect to generate earning improvements of $50 million to $70 million thanks to increased fleet availability and savings on the fleet life cycle.