Times used to be, you needed a car and you didn’t have one? Renting one from a rental car company was the only option, and it was often quite an expensive option. Bt Zipcar has made quite a name for itself with its easy hourly rentals and convenient pick-up spots. Now Avis wants to hitch its wagon to rising Zipcar’s star, and has agreed to buy the company for $500 million in cold, hard cash.
Avis tried to snap up Dollar Thrifty before, but lost out to Hertz, so this likely feels like a pretty darn good way to start out the New Year. Kinda like retail therapy! But new ownership won’t come cheap, as the Wall Street Journal says Avis will pay $12.25 for each Zipcar share
As popular as Zipcar has been, especially in large cities where many people don’t want the hassle of owning a car or having to go to a rental place, it has apparently not been able to post a profit in the 12 years it’s existed. With Avis at the wheel now, it’ll be interesting to see if that changes.
“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 Avis Chairman and Chief Executive Ronald L. Nelson.
Zipcar seems more than ready to become a part of Avis’ flock, as its board unanimously backed the deal and shareholders are also in favor of the arrangement. It can’t back out now anyway, as part of the terms say it can’t look for other bids and would have to pay a hefty fee of $16.8 million to leave the deal on the table.
It’ll be interesting to see if Avis’ experience as a traditional car rental service will meld well with Zipcar’s reputation as an easy car-sharing service that also happens to be not too rough on the wallet. Please, let there be no hidden fees slipped in there in the future and let us still be able to pick up a car from a block away to make an IKEA run.
Avis to Buy Zipcar for $500 Million [Wall Street Journal]