Zipcar Bought For $500 Million By AvisBy Marhgil Macuha on Jan 14, 2013 in Automobile, Business, United States •
Zipcar was bought by Avis for nearly $500 million. With Zipcar on-board, Avis is expected to continue Zipcar‘s service, which offers car rental for as short as one hour period. Zipcar was founded in 2000 and has more than 760,000 members already.
According to Avis Budget Group‘s press release posted online, the combined companies are expected to produce $50-70 million in annual synergies:
Avis Budget expects to generate $50 to $70 million in annual synergies as a result of the transaction. In particular, Avis Budget expects significant cost reductions across the fleet life cycle (from procurement to operations and maintenance to disposition, as well as financing), in addition to savings from eliminating Zipcar’s public-company costs. Avis Budget also plans to achieve substantial cost savings by increasing fleet utilization across the two companies. Significant revenue growth opportunities exist, including by leveraging Avis Budget’s fleet to meet more of Zipsters’ weekend demand, which is currently constrained by fleet availability.
“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,” Ronald L. Nelson, Avis Budget Group chairman and chief executive officer was quoted as saying in the press release.
“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.
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