Avis Budget Rental-Car Group to Buy Zipcar Car-Share Business

Here's another stock you'll probably wish you'd bought in 2012. Zipcar, the car-sharing network, has been bought by Avis Budget Group, the car-rental firm. This is where we missed out: Avis Budget paid $12.25 cash per share for Zipcar, up some 49 percent from its closing price last year. The deal works out to Avis Budget paying about $500 million for Zipcar. Those who live in 20 select major metropolitan areas in the U.S., Canada, the U.K., Spain, and Austria know about Zipcar and its car-sharing business. It's also present on some 300 college campuses. Its vehicles are available on an hourly or daily basis, eliminating the need to own a car. Currently, Zipcar claims 760,000 members—they're called Zipsters, not Zippers—and more than 10,000 vehicles. Avis Budget estimates that the synergies created with the purchase eventually can save the combined firms between $50 million and $70 million. Those savings could materialize by means of discounts in purchasing and the maintenance of a larger fleet, to better utilization of said fleet. As an example, when the weekend demand goes up at Zipcar and down in the rental business, cars could be shifted from one branch to the other. First Drive: 2013 Chevrolet Spark Instrumented Test: 2012 Toyota Prius C Comparison Test: 2011 Chevy Cruze vs. 2012 Ford Focus and Three More Compacts Although car sharing is a little-known concept in some areas of the country, Zipcar says the industry has become an almost-$400-million business the U.S. and is rapidly growing. Zipcar will operate as a subsidiary of Avis Budget out of its new Boston, Massachusetts, offices and key members of its management are expected to stay on to handle its day-to-day operations. from Car and Driver Blog http://blog.caranddriver.com

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