The Role of Private Equity in the Car Wash Space

George Odden, Ardent Advisory

George Odden - Ardent

5/9/2023 - 8:00 - 9:00 AM

Private equity has entered the car wash space in a big way. They have changed how washes are valued and how they are operated. We have really only seen the beginning of how they will influence the space going forward. Ten years ago, only one car wash chain in the top ten in terms of the number of sites was owned or controlled by a private equity firm. Now, all ten are. We have watched this happen and some have taken advantage of elevated valuations. But, what is the long-term impact? How does private equity work? What’s it like to be acquired by a private equity firm? We will look to dispel some of the myths and uncertainties around the private equity world, explain how they are set up and how they make money, why they are attracted to the car wash industry, and what lasting impact they are likely to have. Our economic downturn has had a significant impact on sales transaction volumes and prices. We will examine how transactions are financed, how returns are measured, and what we can look for as interest rates ease. The market is not likely to snap back immediately and owners should set their expectations for value reasonably. Financing markets for car washes have matured dramatically over the last five years. What started as an exercise in bootstrapping one wash then another through equity and mortgages has evolved into a complex world of senior debt, mezzanine, preferred equity, and sale-leasebacks to name just a few vehicles. We will take a more detailed look at the financing paths that are available to today’s owners and which ones may make sense along with the challenging financing market we are facing in a rising interest rate environment.

As an investment banker of over 25 years, George Odden has worked for multinational banks conducting transactions valued in the billions of dollars, as well as having worked in the middle market helping small companies find the right partners to reach business owners’ goals. He started his career as an officer in the United States Navy, serving aboard the USS Tripoli in support of Operation Desert Storm. Having worked on Wall Street at Dillon Read and UBS, with transactions including mergers and acquisitions as well as debt and equity financing, Mr. Odden also led the M&A efforts of two Fortune 500 companies, Rockwell International and Honeywell Aerospace, working to grow these businesses through acquisition and joint venture. Mr. Odden left corporate America to return to investment banking, where he now serves small and middle-market clients, primarily helping private owners sell their businesses. Mr. Odden earned a BA from Cornell University and an MBA from Columbia Business School.

Share This: