AmericanFolkLegend
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1) That valuation strikes me as very low. Considering some recent online acquisitions, just their IP alone (assuming they own it) should put them up several hundred million. Sounds to me like Zipcar believed they were quickly running out of cash, which isn't hard to believe in such a capital-intensive line of business. It just strikes me as odd - and bodes ill for the future of innovation - that a non-product like Instagram could be valued at multiples beyond a tangible game changer like Zipcar.
I was surprised at how low they were valued too. But Zipcar is public so the valuation is pretty transparent. They were bought at something like a 40% premium over there stock price. Maybe they have a huge amount of debt that Avis is assuming?
2) Zipcar and traditional rentals have very different business models and a different basis in consumer demand.
I think the main synergy the new company is shooting for is a leveling of demand. Avis is big with business travelers renting on week days. Zipcar rents to individual consumers and I'd imagine they're busiest on weekends. So you can address both those markets with the same fleet of vehicles.