The car wash industry is one of the new hotbeds of private equity activity, with several buyout firms acquiring regional companies and bundling them into a single business with more scale. Private equity roll-ups, as the strategy is known, aim to create bigger, more valuable companies that can be sold later for multiples of what they paid.
Financial terms of the Wave Wash deal weren’t disclosed Monday.
The deal will boost Super Star Car Wash’s presence in North Texas to 17 locations, including what it described as a “robust development pipeline.” TSG invested in Phoenix-based Super Star Car Wash in December 2021 and has grown the company from 35 to 61 locations, including expansions into D-FW and Los Angeles. It plans to expand to Colorado later this year.
Wave Wash, founded in 1997 by Frank and Karen Meneghetti, is known for its modern car washing processes and well-kept facilities. It has been voted “best car wash” by D Magazine readers, according to the company’s website.
“Frank and the Wave Wash team have done an excellent job developing and operating top-tier car wash locations that offer an exceptional customer experience,” said Super Star Car Wash founder and CEO Reza Amirrezvani in a statement. “As we continue to execute on our growth plans, we are excited to welcome their talented team.”
TSG’s portfolio is loaded with consumer businesses, ranging from Famous Amos cookies and Dutch Bros. coffee to Planet Fitness and Popchips.
Car washes tout themselves as recession resistant, one of the reasons private equity players see the industry as prime for consolidation.
In Atlanta, for example, buyout firm Red Dog Equity LLC has put together a collection of 107 car washes primarily in the Southeast and Midwest. The company it backed, Mammoth Holdings LLC, aims to reach 500 car washes by 2025.
According to industry tracker Preqin, the buyout industry had $873 billion in capital committed by investors but not yet allocated to deals as of June 1.