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Avis to Fuel Growth with France Cars Buyout, Zipcar Expansion

Buy or sell dice

Avis Budget Group, Inc.CAR has traditionally been strongly committed to its expansion strategy. The company has left absolutely no stone unturned in this regard, as it has always been on lookout for different alliances, acquisitions and joint ventures.

Moreover, in an effort to enhance its global footprint, the company invests in other growing markets where car rental demand is on the rise. Avis announced definite plans to acquire France Cars, in an attempt to expand its presence in the French market. The deal, which is anticipated to conclude before the end of 2016, has its terms under covers.

A privately-held car-rental company, France Cars makes nearly €60 million in vehicle rental revenues on an annual basis. Notably, the buyout of this France-based company will add roughly 8,000 cars, vans and light trucks to Avis' existing fleet, thus providing it the edge of having France's second-largest fleet of light commercial vehicles.

AVIS BUDGET GRP Price and Consensus

AVIS BUDGET GRP Price and Consensus | AVIS BUDGET GRP Quote

Additionally, this acquisition will fortify Avis Budget's existence in the local market, by adding over 60 new locations to its rental channel. Consequently, this complements the company's goal of enhancing its services to the local residents, as it caters to all sorts of customers including leisure travelers, entrepreneurs and multinationals.

As mentioned above, Avis Budget's expansion strategy has always been in full swing, and this deal marks another step in extending its presence in the European urban and suburban regions. In this respect, the company also purchased Italy's fourth largest vehicle rental company, Maggiore Group, last year. Some other deals that highlight Avis' focus on international expansion include its partnership with Aeroflot - the largest Russian Carrier; its deal with TrueCar, and partnership with Innovative Funding Services - to extend its car sales program to Oregon, Utah, Missouri and Oklahoma.

Coming back to Avis Budget's love for France, we note that the company's wholly owned subsidiary - Zipcar had inked a deal with the French national railway operator, SNCF, in Apr 2015. The agreement was aimed at providing the French market with progressive mobility solutions.

Talking about Zipcar, this unit of Avis Budget is no less when it comes to expansion. Concurrent to the acquisition of France Cars, we also have news of Zipcar launching its new free-floating car-sharing service in Brussels, Belgium. This launch marks a significant milestone to Zipcar's global expansion, by adding another European country to its existing network in United Kingdom, Spain, France, Austria, Germany and Turkey. Notably, this will be the most flexible car-sharing service in Zipcar's history.

All said, we believe that with its expansion strategy, revenue-generating synergies from various acquisitions, and other fundamental drivers in action, this Zacks Rank #2 (Buy) company is set to reach new heights.

Other Stocks to Consider

Other well-ranked stocks in the same industry include Acacia Research Corporation ACTG , Performant Financial Corporation PFMT , both sporting a Zacks Rank #1 (Strong Buy) and SPS Commerce, Inc. SPSC which carries a Zacks Rank #2.You can see the complete list of today's Zacks #1 Rank stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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