Sponsored by Car Wash Advisory
The carwash industry has emerged as a dynamic sector, witnessing notable activity and strategic transactions in recent years. Being a fragmented market and featuring high margins and significant tangible asset bases, large-scale investors have entered the industry in droves over the past five years. This influx of capital and investors has changed the industry — and not just for operators.
CWA background
Car Wash Advisory (CWA) was founded by Harry Caruso in 2019. Having no carwash experience, and in truth never having been a carwash patron, it seemed incomprehensible why such a venture would be embarked on by an individual with no background in the industry. Harry saw an opportunity in the shifting landscape to bring together a culmination of his past experiences to provide what he saw to be a severely undeserved need in a quickly changing market.
“The genesis was rather happenstance in circumstance. I attended the 2019 The Car Wash Show™ in Nashville for no other reason than owing a favor to a friend who needed financing for a few carwashes out in Texas. I was in the process of selling a machine learning company I had co-founded, I had extra time on my hands and decidedly went to the show to see what all this carwash stuff was all about,” remarks Harry when accounting for the earliest days of Car Wash Advisory. “What I found was something I didn’t expect and for which was so overwhelming that I incepted the idea for CWA while there at the show and incorporated on literally the plane ride home. The industry was incredible, but the operators were even better. Carwash owners, to this day, remain as the single most impressive group of owners and operators in any industry I’ve ever been exposed to. The level of morals, values, ethics and hard workers … it was ubiquitous across the show room floor and to a level I’ve never seen. These were all good people. People you’d like to work with, be associated with, who you can understand and trust. Combining this with the looming and inevitable future of significant institutional investor involvement that was clearly coming, I knew there was not only a need today, but also a growing need to come, for a group to bring professionalism and expert knowledge on the transactional advisory side to this population of tremendously impressive business owners.”
CWA: history plus full service offering of an IB
Car Wash Advisory is a premier sell-side investment bank specializing in the carwash sector. With a blend of industry expertise, financial acumen and strategic insight, they are dedicated to maximizing the value of your carwash business and guiding you through every step of the selling process.
In today’s complex and rapidly evolving business landscape, the decision to sell a business is a significant and multifaceted undertaking that requires careful consideration and strategic planning. While many entrepreneurs may possess a deep understanding of their business operations and industry dynamics, navigating the intricacies of the sale process demands specialized expertise and guidance. In this context, the role of an investment banker (IB) as an advisor for selling a carwash business is indispensable.
The Car Wash Advisory team possesses a deep understanding of current market trends, industry dynamics and valuation methodologies, enabling it to provide invaluable insights and strategic guidance throughout the sale process. The team’s insight is not always what one expects, or wants to hear, but it is honest, accurate and supported by data — not opinion. From the initial planning stages to the final negotiations and closing, Car Wash Advisory provides guidance, support and representation, ensuring that the owner’s interests are protected and that the transaction proceeds smoothly and efficiently. Their role extends beyond mere transaction facilitation; they act as a strategic partner, offering tailored solutions and recommendations to address unique challenges and opportunities.
In addition to market knowledge and advisory expertise, CWA plays a crucial role in facilitating connections and access to a wide network of potential buyers. This access to a broad pool of prospective buyers enhances the likelihood of achieving a favorable outcome and maximizing value for the business owner. This is especially important in the last nine months during a slowdown of M&A activity, as a vast majority of transactions are occurring between sellers and buyers who are not currently in the carwash space. These are groups whom the average individual or broker would not have access to not only attract, but also structure a transaction due to the level of financial literacy required to mediate the needs of both parties.
Moreover, Car Wash Advisory adds credibility and professionalism to the sale process, instilling confidence in potential buyers and stakeholders. Their involvement signals to the market that the business is being sold through a structured and transparent process, thereby attracting serious buyers and mitigating concerns regarding confidentiality, due diligence, and transaction execution. This enhanced credibility can significantly enhance the marketability of the business and ultimately result in a more successful and lucrative transaction.
Here are some key functions that your investment banking advisor should perform:
Strategic advisory: Investment bankers provide strategic advice to clients on various aspects of the transaction, including valuation, deal structuring and negotiation strategies. They help clients identify their objectives, assess market conditions and develop a tailored approach to achieve their goals.
Valuation: Investment bankers conduct comprehensive valuations of businesses to determine their fair market value. Using a variety of methodologies, including discounted cash flow analysis, comparable company analysis, and precedent transactions analysis, they assess the financial performance, growth prospects, and risk profile of the target company to arrive at an accurate valuation.
Marketing and deal sourcing: Investment bankers leverage their extensive network of contacts and relationships to identify potential buyers or sellers for a transaction. They prepare marketing materials, such as confidential information memoranda (CIMs) or pitch decks, to showcase the opportunity and attract interest from qualified parties.
Due diligence management: Investment bankers coordinate the due diligence process, ensuring that all relevant information about the target company is gathered, organized and presented to potential buyers or investors. They work closely with legal, accounting and other advisors to address any issues or concerns that may arise during due diligence.
Transaction structuring: Investment bankers assist in structuring the transaction to optimize its financial and tax implications for all parties involved. They evaluate various deal structures, such as asset sales or mergers, and recommend the most appropriate approach based on the client’s objectives and circumstances. They also add immeasurable value for situations where the necessary capital may not be available and can structure other forms of no cash considerations.
Negotiation support: Investment bankers play a crucial role in negotiating the terms of the transaction on behalf of their clients. They help clients navigate complex negotiations, advocate for their interests and strive to achieve favorable outcomes that maximize value and minimize risk.
Documentation and closing: Investment bankers collaborate with legal advisors to draft and review transaction documents, such as purchase agreements, confidentiality agreements and disclosure schedules. They ensure that all necessary documentation is prepared accurately and in compliance with regulatory requirements, facilitating a smooth and timely closing process.
Post-transaction support: Investment bankers provide ongoing support to clients after the transaction is completed, assisting with integration planning, stakeholder communications, and other post-closing activities to ensure a seamless transition and maximize the long-term success of the deal.
What’s made it all possible
Car Wash Advisory attributes its success to one thing. Oddly enough, it’s not the team’s Wall Street investment banking backgrounds, it’s not knowledge and experience working with more esoteric and complicated capital structure, and in fact, it’s none of the reasons one would initially expect.
“The people, as people,” remarks Harry. “That’s what I attribute everything to. Working with and surrounding myself with people that I am so fortunate to have around me. We have the best group of people, with the strongest values and understanding of right versus wrong that I’ve ever seen at a company. I couldn’t be prouder of this.”
The future
The carwash industry is in a very different place than it was five years ago. All parties touching the space have experienced significant changes. Consumers across the nation now have unprecedented access to more quality and available carwashes than ever before. Owners and operators have seen the light and dark side of consolidation and external investors’ involvement. The M&A advisor side has seen significant changes as well.
Over the past several years more and more was needed from advisors, brokers and intermediaries of the industry to satiate both increasingly complex sides of these transactions. Moving forward, and especially with the recent and significant slowdown in transactional volume the industry has seen specifically over the past 12 months, Car Wash Advisory looks forward to the future; maintaining a confident view that the need for more in-depth, professional and knowledge-based advisory will not only persistent, but it will also increase.
Car Wash Advisory is an M&A advisory firm that focuses exclusively on carwashes. At our core, we’re a carwash investment bank. We sell carwashes for owners. The carwash industry is brimming with more innovation than ever before. So much passion, collaboration and teamwork is being brought to the operating side of the business on a daily basis. We stand for bringing all the same — but to the transactional side of the carwash industry. For more information, please visit www.carwashadvisory.com.
