Avis, the US-owned car rental giant, has announced its intention to acquire ZipCar, a website that allows customers to use shared cars instead of owning or renting one.
ZipCar was founded in 2000, effectively creating the car sharing market and exemplifying what is often termed "collaborative consumption". In recent years, Zipcar has acquired regional car sharing services such as StreetCar in the UK and Avancar in Spain.
In April 2011, the company launched its initial public offering. To begin with, the company’s stock was in high demand, rising 66% on launch. Since then, however, the company’s share price has fallen by around 66%.
In the last few quarters, Zipcar’s revenue has consistently grown by around 15% to over $700 million. However, profit has waivered, and the combined net income for the financial year after three quarters sits at just $650,000.
Avis has made an offer of $12.25 per share, a 49% premium on ZipCar’s share price on Monday.
If the offer is accepted by Zipcar’s shareholders, it would represent the acquisition of a potential disruptor by an established player. It may be that Avis’ intention is to simply remove a potential competitor.
