Zipcar Raises $174.3 Million, 31% More Than Sought, in IPO

Thursday, April 14, 2011

By Lee Spears - Apr 14, 2011
Zipcar Inc., the car-sharing company that rents vehicles by the hour, raised $174.3 million in its initial public offering, 31 percent more than it sought, after it increased the shares and priced them above the range.
The company, based in Cambridge, Massachusetts, sold 9.7 million shares at $18 each, according to data compiled by Bloomberg. Zipcar had offered 8.3 million shares at $14 to $16 apiece, according to a filing with the U.S. Securities and Exchange Commission. Proceeds will be used to reduce debt and expand internationally, the filing showed.
Zipcar and Arcos Dorados Holdings Inc., the Buenos Aires- based operator of McDonald’s Corp. (MCD) restaurants in Latin America and the Caribbean, expanded their IPOs yesterday to meet demand. Seven companies are attempting to raise at least $1.89 billion in U.S. initial offerings this week, the busiest for new-stock sales in the country in more than two months.
The Zipcar offering was led by New York-based Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) The shares will be listed on the Nasdaq Stock Market under the symbol ZIP.
The car-rental service operates in 14 metropolitan areas, including London, and has more than 8,000 cars. It plans to expand in the U.S. and international markets including Europe, according to the filing. The company’s net loss in 2010 widened to $14.1 million from $4.67 million a year earlier, the filing showed, while revenue increased 42 percent to $186.1 million in the same period.