ONCAP Hits 8x on Sale of Mister Car Wash

ONCAP Hits 8x on Sale of Mister Car Wash

mister car wash nf1Onex Corporation, through its ONCAP II investment fund, has completed the sale of Car Wash Partners (DBA Mister Car Wash), the largest independent full-service car wash chain in the US, to Leonard Green & Partners.

Mister Car Wash operates 134 car washes and 32 lube centers in 14 states across the country, making it the largest car wash and lube center chain in the United States.  Mister Car Wash is the most acquisitive company in the car wash industry having completed over 25 acquisitions representing over 70 stores since 2009.  The company has 4,800 employees and services more than 15 million vehicles annually.  Mister Car Wash was founded in 1996 and is headquartered in Tucson, AZ (www.mistercarwash.com).

ONCAP acquired Mister Car Wash in April 2007.  During its term of ownership, ONCAP worked alongside the management team at Mister Car Wash to build a larger and more diversified business, growing from 39 locations to more than 130 today.

Including prior distributions, ONCAP received net proceeds of $423 million compared to its original investment of $52 million. This represents a gross multiple of capital invested of about 8.1 times and a gross IRR of 36%.  Onex received net proceeds of $153 million from this sale.  Onex makes private equity investments through the Onex Partners and the ONCAP families of funds. Onex has more than $22 billion of assets under management and is based in Toronto with additional offices in New York and London (www.onex.com).

michael lay nf1“This is a great outcome for everyone involved,” said Michael Lay, Managing Partner of ONCAP. “The management team has done a terrific job building the leading platform in the car wash space and we are confident they will continue their strong growth trajectory going forward. We wish the team ongoing success and want to thank them for the wonderful partnership we have enjoyed over the past seven years.”

Harris Williams & Co. acted as lead financial advisor to Mister Car Wash.  The transaction, which closed on August 21, 2014, was led by Joe Conner, Jason Bass, Jershon Jones, and Jeff Kidd of Harris Williams & Co.’s Transportation & Logistics (T&L) Group, and Chris Williams from the firm’s Richmond office.

“The car wash sector is highly fragmented with 95% of operators owning five locations or less.  Mister Car Wash’s track record and strategy have driven both scale and best-in-class operations,” said Jershon Jones, vice president in Harris Williams & Co.’s T&L Group. “Mister Car Wash is poised to build on its outstanding track record and lead the industry for the foreseeable future.”

Leonard Green & Partners’ invests in middle-market companies with market-leading franchises and defensible competitive positions, attractive growth prospects and proven management teams. The firm’s investments are in the form of traditional buyouts, going-private transactions, recapitalizations, growth capital investments, corporate carve-outs and selective public equity and debt positions. Sectors of interest include retail, distribution, healthcare, aerospace/defense and consumer/business services. Leonard Green & Partners was established in 1989 and manages approximately $15 billion of equity capital. The firm is located in Los Angeles, CA (www.leonardgreen.com).

“Mister Car Wash has established itself as the premier operator in the car wash and lube center industry.  Leonard Green’s longstanding experience with world-class multi-site operators will aid in the company’s continued expansion,” said Joe Conner, managing director in Harris Williams & Co.’s T&L Group. “Harris Williams & Co. is proud to have partnered with Mister Car Wash as the company enters the next phase of growth and we believe they have found a great partner in Leonard Green.”

2014 PEPD • Private Equity’s Leading News Magazine • 8-22-14

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