Professional Carwashing & Detailing

Industry Watch - January 2013

January 3, 2013

COMPANY NEWS

· Zep Inc., a producer and marketer of a wide range of cleaning and maintenance solutions, announced that a wholly owned subsidiary had completed the purchase of the Vehicle Care division of Ecolab Inc. effective Dec. 1, 2012 for approximately $120 million.

The combination of Ecolab’s Vehicle Care division with Zep’s existing North American sales and service vehicle-wash operations and its Niagara and Washtronics fleet-wash operations creates a new platform, Zep Vehicle Care, representing approximately 13 percent of Zep’s net sales on a pro forma basis.

“The creation of Zep Vehicle Care is an example of our disciplined focus on key markets, like transportation, where we bring unique value and expertise to our
customers,” John K. Morgan, chairman, president and CEO of Zep Inc, said. “We expect the combination of our respective sales organizations with best-in-class vehicle care solutions will allow us to capitalize on growth opportunities in the $1 billion U.S. vehicle care marketplace in a way that is accretive to earnings.”

The Zep Vehicle Care portfolio of brands, comprised of Blue Coral®, Black Magic®, Rain-X®, Zep® Enviroedge™, Niagara National™, Washtronics™ and Armor All Professional™, includes soaps, polishes, sealants and protectants, detail products, wheel and tire treatments, air fresheners and related equipment.

Zep Vehicle Care will offer its products and services through a world-class team of service and support professionals to provide car, truck and fleet wash operators with high efficacy products for their wash tunnels and retail operations. Zep Inc. financed the acquisition using existing debt capacity. While both the interest rate and leverage ratio are very manageable, the company will immediately turn much of its focus to deleveraging its balance sheet, thereby preparing for additional expansion in the long term. The company will incur acquisition-related costs associated with advisory, legal and other due diligence-related services and transition costs during its first and second quarters of fiscal 2013.

· PDQ Manufacturing Inc. revealed its new ProTouch® ICON Road Show Trailer in November. The trailer will travel the country and make appearances at PDQ facilities, trade shows and customer locations.

The trailer can provide on-site demonstrations of the company’s friction carwash system, and the focal point is an actual, full-size carwash system. Fully operational, the gantry will run through a complete wash cycle without water, and it includes a voiceover that explains the wash process.

The rear of the trailer is a mobile office complete with Internet access that allows visitors to view real-time performance statistics and operational status.

“We’re always looking for different ways to introduce our products to the market, and since we have a new exciting option for a friction wash, we knew we needed something different to take out to customer sites and also to get our channel partners online,” Ken Dollhopf, PDQ’s vice president of marketing and new business development, said. “In a lot of ways we can do more with the Road Show Trailer than we can at a trade show. It gets our sales force involved and gives us a true one-on-one connection with the customer.”

· SONNY’S The CarWash Factory announced the addition of FASTECH Inc. to their Select Service Organization (SSO) network. Fastech will now distribute, install and service SONNY’S tunnel equipment and AutoPilot Control Systems in Southern California.

“Fastech and their people are a perfect fit for what SONNY’S looks for in our SSO group,” Robert Picard, vice president of sales for SONNY’S, said. “With responsive, experienced crews available 24 hours a day, 7 days per week, they have the expertise and strength to support our clients before, during and after their decision to choose SONNY’S.”

Fastech is a full-service company that provides carwash consulting, equipment, construction, service and chemicals. Their project management team represents 20 years of experience guiding installations. Fastech can be contacted with questions regarding sales, service, installation and support.

PEOPLE NEWS

· Warsaw Chemical Co. Inc. announced Scott Oster as Southeast regional sales manager. Oster has many years of carwash experience, beginning as a chemical solutions distributor and becoming involved in the management of over a dozen carwash locations in the Southeast. He also opened his own express exterior carwash in 2005 and most recently held the position of Bay Wash Division manager for SONNY’S Enterprises.

At Warsaw Chemical, Oster will be responsible for working directly with the company’s distributors in the Southeast region of the United States. Oster lives in Georgia with his wife and two daughters.

· Metalcraft, a producer of barcode and RFID technologies, announced a number of promotions and new hires in November. CEO Douglas K. Peterson retired from his position, but he remained as the chairman of the board. Steve A. Doerfler was promoted from president to president and CEO on Oct. 1.

Doerfler has been with Metalcraft for 22 years moving to Mason City in 1990. He is a member of Metalcraft’s Board of Directors and serves as an ESOP trustee. In addition, he currently serves on the Board of Directors for Clear Lake Bank & Trust; on the GPI Executive Committee as treasurer; and as a member of Mercy Medical Center-North Iowa’s Planning, Marketing & Legislation (PML) Committee.

Also, Jonathan Heinz was promoted from IT director to IT manager, Bill Phillips was hired as sales manager and Tom Bolanos was named a direct sales representative. In June, the company promoted Julia Deets to vice president, sales & marketing and added Matt Martin as a sales representative.

ASSOCIATION NEWS

· The Midwest Carwash Association (MCA) changed the location of its 2013 Expo and revamped the show program. The 2013 MCA Expo will be held Feb. 4-6 at the Sheraton Hotel and Conference Center in Novi, MI. The 2012 MCA Expo was held at the Suburban Collection Showplace, and it ran from Jan. 31 to Feb. 2.

· The Puget Sound Car Wash Association (PSCWA) hung banners and delivered postcards here to let residents know about the pollution caused by charity carwashes. The banners were placed over high-traffic roadways to inform the public of the correlation between storm water pollution and parking lot carwashing. The banners urged organizations to sell CharityCarWash.org fundraiser tickets instead.

To reinforce the message, the PSCWA produced postcards that described in greater detail the pollution caused by unregulated carwashes. The cards also listed the benefits of using the ticket program. The postcards were delivered to businesses and nonprofit organizations throughout the areas surrounding the banner sites.

The banner and postcard project was funded by a Make A Splash grant from the city of Tacoma.

· A National Automatic Merchandising Association (NAMA) “Gratitude Event” was held in early November on the campus of Tulane University. Hundreds of free snacks and beverages were given away.

The two-hour event showed consumers the most advanced vending machines, coffee brewers, products and technology available. The event was held the day before NAMA’s annual Coffee, Tea & Water Show in New Orleans.

Gratitude Events are designed as a thank you to vending customers, especially Generation Y users. According to NAMA, research showed users aged 18 to 29 actually prefer vending over c-stores and grocery stores for snacks and cold beverages.

NAMA was founded in 1936, and it provides advocacy, education and research for its membership.