Watch stocks you care about
The single, easiest way to keep track of all the stocks that matter...
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: The all-cash deal values Zipcar at $12.25 per share and represents a whopping 49% premium to its closing price on Monday. Avis is making the move to get in on the high-growth car-sharing market and compete with Hertz Global Holdings (NYSE: HTZ ) which already has a service in the space, and judging by its own stock's 5% pop today, Mr. Market is pleased with the price being paid to do it.
Now what: Avis expects to generate $50 to $70 million in annual synergies as a result of the deal. "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 CEO Ronald Nelson. "We expect to apply Avis Budget's experience and efficiencies of fleet management with Zipcar's proven, customer-friendly technology to accelerate the growth of the Zipcar brand and to provide more options for Zipsters in more places." So while Zipcar shares might be all popped out, Avis and its newly bolstered growth potential might be worth looking into.
Interested in more info on Zipcar? Add it to your watchlist.
Interested in more info on Avis? Add it to your watchlist.