![]() The express car wash market is valued at roughly $11 billion and is expected to expand at a compound annual growth rate of 4.0 percent to 4.8 percent through 2028, according to Grand View Research Inc. Most offer do-it-yourself vacuums, and some even offer optional detailing services. These locations are almost fully automated, require very little labor and use conveyor or belt equipment to move vehicles through the car washing process. They are interested in car wash companies that own express washes, also known as tunnel washes or conveyer washes. To be clear, private equity firms aren’t investing in do-it-yourself car washes with open bays, soft washes attached to gas stations or full-service car washes. “Even in the face of inflation and rising gas prices, we believe that the joy customers receive from keeping their car clean, coupled with the relative affordability of our service, has created a strong tailwind for expansion.” “When we look at the size of our industry, we see demand outpacing supply,” says John Lai, chairperson and CEO of Mister Car Wash. Related: Investors Pour Capital into Deep Pool of Private Equity Real Estate Funds Moreover, development activity isn’t limited to one geographic area. While most private equity-backed car wash operators have aggressive acquisition goals, their expansion plans also require the development of tens of thousands of locations. Prior to its IPO, it too was private equity-backed: Leonard Green & Partners LP had owned the company since 2014. Mister Car Wash, for example, is the largest car wash operator in the North America with nearly 400 locations nationwide. Today, these private equity-backed car wash operators have the rare opportunity to establish themselves as leaders in a highly fragmented space, where roughly 75 percent of car wash companies operate only one to two sites. Related: How Real Estate Fits into One Wealth Manager’s Aim to Help Affluent People of Color Build Generational Wealth ![]() Last year, for example, private equity made inroads into the car wash industry with Imperial Capital acquiring Riptide Auto Wash, Wafra acquiring Motor City Car Wash and Skyknight Capital adding HyperShine Car Wash to its portfolio. ![]() When Mister Car Wash debuted on the NYSE last summer and its shares rallied to the price of $22.40-49 percent above the IPO price of $15-many private equity players took notice and took action, either by investing more in the car wash brands they already owned or by seeking car wash operators to add to their portfolios.
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