Avis to pay $500 million for Cambridge-based Zipcar
The Avis Budget Group, a New Jersey-based car rental service, will shell out about $500 million to buy Zipcar, a Cambridge-based car sharing network.
The deal is expected to be completed in the spring of 2013.
According to the companies, car sharing has grown to be a nearly $400 million business in the United States and is expanding rapidly in major cities around the world.
Zipcar now has more than 760,000 members, known as “Zipsters, “with a market-leading presence in 20 major metropolitan areas in the United States, Canada and Europe, and fleet positioned at over 300 college and university campuses.
Avis Budget expects to generate $50 to $70 million in annual synergies as a result of the deal.
“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.
Following the acquisition, Zipcar will operate as a subsidiary of Avis Budget Group and will continue with its planned move to new headquarters in Boston. Avis Budget anticipates that key members of the Zipcar management team, including Griffith and Mark Norman, president and chief operating officer, will continue to set the overall direction and run day-to-day operations of Zipcar.