It might be easier to get a Zipcar rental on weekends now that the popular urban car-sharing service is being acquired by traditional car rental company Avis Budget Group.
The companies said Wednesday that Avis ( has agreed to buy )Zipcar ( for about $500 million, or $12.25 per share in cash, which is nearly 50% above Monday's closing price. )
Zipcar's stock surged Wednesday to match Avis' valuation. But the stock is still about 50% below about its initial public offering price of $18.
The company made its market debut on April 14, 2011, and surged 70% that first day to a market cap of $1 billion. But then the stock price peaked and made a precipitous slide of more than 50% until Wednesday's rally.
Avis said it plans to use its fleet of rental cars to beef up Zipcar for its weekend demand, "which is currently constrained by fleet availability."
As a "car sharing" company, Zipcar operates under a slightly different model, appealing to customers who would rather rent a car by the hour, instead of by the day, though it offers services for both. Most rental car companies, including Avis, offer rentals on a daily or weekly basis.
The deal positions Avis to better compete with rental companies that offer car-sharing memberships, such as Hertz (, which has Hertz On Demand, and Enterprise Rent-A-Car, which has WeCar. )
Venture capitalists who were early Zipcar investors could profit quite nicely. Revolution, a fund led by AOL ( co-founder Steve Case, could make more than )$80 million from the merger.
The deal requires final approval from Zipcar shareholders. Avis and Zipcar expect the deal to be completed in the spring.
Citigroup ( is the financial adviser for Avis. )Morgan Stanley ( is the financial adviser to Zipcar. )