Avis Budget Group Inc. (CAR) and Zipcar Inc. (ZIP) announced that Avis has agreed to acquire Zipcar for $12.25 per share in cash, representing a total transaction value of approximately $500 million. Avis also reiterated its estimates of full-year 2012 results.
Zipcar now has more than 760,000 members, known as Zipsters, with presence in 20 major metropolitan areas in the United States, Canada and Europe, and fleet positioned at over 300 college and university campuses.
Avis expects to generate $50 million to $70 million in annual synergies as a result of the transaction. The transaction is expected to be accretive to Avis Budget's earnings per share in the second year following the acquisition, excluding certain items and purchase-accounting effects.
The Boards of both companies approved the transaction. Zipcar shareholders representing approximately 32% of the outstanding common stock have agreed to vote their shares in support of the transaction. The transaction is subject to approval by Zipcar shareholders and other customary closing conditions, and is expected to be completed in the spring of 2013.
Avis continues to expect full-year 2012 revenue to be approximately $7.3 billion, a 24% increase compared to 2011, and 2012 Adjusted EBITDA will be approximately $825 million to $840 million, excluding certain items, an increase of 35% to 38% compared to the prior year.
Avis continues to expect 2012 pretax income to be $450 million to $465 million and earnings per share to be approximately $2.35 to $2.45, excluding certain items.
by RTT Staff Writer
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