Avis Budget Acquires Payless for $50 Million

Avis Budget Group, Inc. announced today that it has acquired Payless Car Rental, the sixth largest car rental company in North America, for approximately $50 million in cash. The addition of the Payless brand will give Avis Budget Group a strong position in the fast-growing deep-value segment of the car rental industry. The deal to buy Payless follows Avis Budget’s acquisition of Zipcar earlier this year.

Founded in 1971, Payless brings approximately 120 rental locations to Avis Budget Group's global network in the United States, Canada, Europe and South America, including many in major airport locations. Similar to Avis Budget Group, Payless operates with a hybrid model of corporately operated locations along with locations operated by licensees. Unlike the Avis Budget Group's premium Avis brand and mid-tier Budget brand, Payless focuses on the deep-value segment of car rental customers.

Payless generates approximately $80 million in annual revenue, while Avis Budget Group posted approximately $5 billion in revenue in 2012.

Avis Budget said it intends to operate Payless as a separate brand from a customer perspective, while realizing significant cost savings as a result of the transaction, primarily from lower vehicle depreciation, reduced fleet interest expense and administrative cost synergies.

"Payless expands our global footprint, enables us to support Budget's mid-tier brand positioning, and gives us greater flexibility to capitalize on opportunities in an additional segment of the car rental market in order to help accelerate our growth," said Ronald L. Nelson, Avis Budget Group chairman and chief executive officer. "At the same time, we expect this transaction to generate an attractive return on our investment."

Comments

  1. angela duffy [ July 21, 2013 @ 09:01AM ]

    will avis be purchasing your corp and franchise locations?

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

Rentals and Terrorist Activity: Time to Hone the Plan

Terrorist activity is frequently tied to a rental vehicle. In today’s heightened risk environment and the potential for terrorism from within, local operators need to hone an action plan.

How Technology Is Addressing Car Rental Underutilization

Three new companies that don’t own fleet are renting your cars through their apps — and pulling traditional car rental into the new mobility agenda.

Trends in the Low-Cab Forward Market

After a day with Isuzu, here are some thoughts on low-cab forward sales, diesel versus gas, and how hard is it to tilt that cab by hand, especially on Isuzu's new Class 6 FTR?

Job Finder: Access Top Talent. Fill Key Positions.