Avis Budget Group will acquire the top company in the car-sharing business, Zipcar, for about $500 million.
Avis Budget will pay $12.25 a share for Zipcar, 49% more than Zipcar’s Dec. 31 closing share price. The acquisition is slated to close by the end of March.
Zipcar, which went public in April 2011, has more than 760,000 members and operates in 20 cities and more than 300 college campuses in North America and the U.K.
For the first three quarters of 2012, Zipcar’s revenue increased 16% from a year earlier to $208.2 million, while the company reported net income of $571,000, up from an $11 million loss a year earlier.
The U.S. car-sharing industry also includes the Enterprise CarShare unit, the Hertz On Demand division and Daimler’s Car2Go unit. The entire sector generates about $400 million a year in revenue, according to Avis Budget.
"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 CEO Ronald Nelson in a statement. "We see car sharing as highly complementary to traditional car rental."
Avis Budget shares were up about 5% at about 10:30 a.m. Eastern time Wednesday.
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