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Driven Brands is the largest automotive services company in North America, operating approximately 5,200 locations across 49 U.S. states and 13 other countries as of the end of fiscal year 2024. The company provides a wide range of automotive services to retail and commercial customers through a diversified platform. Its services include paint, collision, glass, repair, oil changes, car washes, and other high-frequency automotive maintenance services.
- Maintenance - Offers oil changes, regularly scheduled maintenance, and as-needed automotive services such as vehicle component repair and replacement through brands like Take 5 Oil Change® and Meineke Car Care Center®.
- Car Wash - Provides express-style conveyor car wash services to retail and commercial customers under the IMO® brand in Europe and Australia and the Take 5 Car Wash® brand in the U.S..
- Paint, Collision & Glass - Services retail and commercial customers, including fleet operators and insurance carriers, with brands such as ABRA®, CARSTAR®, Fix Auto®, MAACO®, AutoGlassNow®, and Uniban®.
- Platform Services - Generates revenue from the sale of supplies and other products, automotive training services, and franchise license and royalty fees through brands like 1-800 Radiator & A/C®, Spire Supply, Driven Advantage, and ATI.
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Considering the recent divestiture of the U.S. Carwash business and the associated asset impairments, can you elaborate on how this transaction will affect your SG&A expense trajectory and margin normalization in the near term? [reference: questions in Q17, Q12; transcript details][Q12]
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With Take 5 Oil Change driving significant unit growth but expecting a normalization of same-store sales growth below the strong Q4 levels, how do you plan to sustain improvements in premiumization and non-oil change revenue over the coming year? [reference: Q10, Q11; transcript details][Q10]
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In light of your shift from a historically acquisitive strategy to a focus on organic growth, what challenges do you foresee in meeting your long-term growth targets without significant M&A activity, especially given the ongoing macroeconomic headwinds? [reference: Q4 by Phillip Blee, other related queries; transcript details][Q4]
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Your Q4 results showed a decline in operating income alongside increased CapEx and higher impairments; can you provide more detail on the underlying drivers of this decline and your plans to stabilize operating performance going forward? [reference: Q5 details; transcript details][Q5]
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As you execute on your deleveraging strategy through debt paydowns and asset divestitures, can you outline the expected timeline and quantitative impact on your net leverage ratio and free cash flow generation throughout 2025? [reference: Q1 and Q21; transcript details][Q1]
Notable M&A activity and strategic investments in the past 3 years.
| Company | Year | Details |
|---|---|---|
Maintenance Segment Acquisition (Q1 2024) | 2024 | Completed in Q1 2024 for 2 sites with an aggregate cash consideration of approximately $2.3 million (net of cash acquired and liabilities assumed); the deal was structured as a business combination with detailed asset and liability allocations—including $695K in goodwill that is substantially tax‐deductible. |
International Car Wash Acquisition (Q1 2024) | 2024 | Executed in Q1 2024 for 1 site in the international Car Wash segment with aggregate cash consideration of less than $2 million (net of cash acquired and liabilities assumed), aligning with the company’s strategic expansion in international markets. |
Maintenance Segment Acquisition (Q3 2024) | 2024 | Completed in Q3 2024 for 2 sites with an aggregate cash consideration of less than $2 million (net of cash acquired and liabilities assumed), supporting the company’s strategy to drive synergies in the Maintenance segment. |
International Car Wash Acquisition (Q3 2024) | 2024 | Finalized during the nine months ended September 28, 2024, this acquisition of 1 site in the Car Wash segment was executed for less than $2 million (net of cash acquired and liabilities assumed), reinforcing the segment’s footprint. |
Maintenance Segment Acquisition (Q1 2023, 2 deals) | 2023 | In Q1 2023, the company completed two deals (covering 2 sites) in the Maintenance segment for an aggregate cash consideration of about $2 million; the acquisition, accounted for as a business combination, included detailed asset allocations and generated $695K in goodwill that is substantially deductible for income tax purposes. |
Car Wash Segment Acquisition (Q1 2023, 1 deal) | 2023 | A single acquisition in Q1 2023 in the Car Wash segment for 1 site was executed with an aggregate cash consideration of approximately $11 million, acquiring significant property, equipment, and generating $2,724K in goodwill to support synergies. |
Maintenance Segment Acquisition (Q2 2023, 3 deals) | 2023 | During Q2 2023, 3 deals (covering 3 sites) were completed for about $6 million in aggregate cash consideration; the deal included operating lease and property assets along with deferred consideration ($285K) and generated $2,445K in goodwill. |
Car Wash Segment Acquisition (Q2 2023, 2 deals) | 2023 | Two acquisitions in Q2 2023, covering 3 sites in the Car Wash segment, were executed for approximately $15 million in aggregate cash consideration, with key assets including property and equipment and associated goodwill supporting the segment’s growth. |
Paint, Collision & Glass Acquisition (Q2 2023, 2 deals) | 2023 | In Q2 2023, 2 deals in the Paint, Collision & Glass segment were completed for roughly $6 million (net of cash adjustments); the transactions delivered inventory, property & equipment, and a notable $4,889K in goodwill, with specific amortization schedules for acquired intangibles. |
Maintenance Segment Acquisition (Q3 2023, 5 deals) | 2023 | Completed over the nine months ended September 30, 2023, the company acquired 5 sites in the Maintenance segment for an aggregate cash consideration of about $8 million; assets acquired included operating lease rights and property with a resulting goodwill of approximately $3,759K. |
Car Wash Segment Acquisition (Q3 2023, 3 deals) | 2023 | In Q3 2023, 3 deals representing 4 sites in the Car Wash segment were executed for an aggregate cash consideration of approximately $15 million, with critical acquisitions of property, equipment, and generation of significant goodwill. |
Paint, Collision & Glass Acquisition (Q3 2023, 2 deals) | 2023 | Two deals in Q3 2023 in the Paint, Collision & Glass segment were completed, delivering assets such as inventory, property & equipment, and deferred tax assets for a total consideration of about $5.64 million and generating substantial goodwill that is tax‐advantaged. |
Car Wash Acquisition (March 2022) | 2022 | The March 2022 Car Wash acquisition involved 6 sites (despite the initial reference to 4 sites) for an aggregate cash consideration of approximately $43.5 million; assets acquired included cash, land & building, equipment, and a $10.6M goodwill component that supported strategic growth in the segment. |
Maintenance Acquisition (March 2022) | 2022 | Completed in March 2022 for 1 site in the Maintenance segment, this deal involved an aggregate cash consideration of $1.5 million with assets including land, building, equipment, and a deferred tax asset, resulting in $430K in goodwill that is substantially deductible. |
Car Wash Acquisition (June 2022) | 2022 | Executed during June 2022, this series of acquisitions in the Car Wash segment covered 12 deals representing 17 sites for a total cash consideration of approximately $164.7 million; notably, the acquisition of Jimmy Clean Car Wash on June 14, 2022, contributed 3 sites for $31.9 million. |
Speedy Shine Express Car Wash | 2022 | In July 2022, the Speedy Shine Express Car Wash acquisition for 2 sites was completed with a total consideration of $33.5 million; key assets acquired include cash, land, building, car wash equipment, and deferred tax assets, with recorded goodwill of approximately $17.29 million. |
Car Wash Acquisition (September 2022) | 2022 | The September 2022 Car Wash acquisition involved 26 sites across 18 deals with an aggregate cash consideration of around $266.8 million (net of cash and liabilities adjustments), incorporating previous deals such as Jimmy Clean and Speedy Shine to enhance market density. |
Maintenance Acquisition (June 2022, 2 sites) | 2022 | Completed in June 2022 for 2 sites in the Maintenance segment, this acquisition was executed for approximately $2.9 million with assets comprising land & building, equipment, and deferred tax assets, resulting in $1.733 million in goodwill. |
Maintenance Acquisition (September 2022, 10 sites) | 2022 | In September 2022, the company acquired 10 sites in the Maintenance segment for an aggregate cash consideration of $20.5 million; the transaction provided operational assets (land, building, inventory, etc.), net assets of $5.025 million, and generated $15.492 million in goodwill. |
All Star Glass Acquisition | 2022 | On April 28, 2022, the All Star Glass deal in the Paint, Collision & Glass segment was completed for 30 sites with total consideration of $43.7 million; the acquisition delivered a mix of cash, lease assets, equipment, inventory, and intangibles (trade name and customer relationships), producing $26.303 million in goodwill and defined amortization periods. |
K&K Glass Acquisition | 2022 | Executed on July 6, 2022, this acquisition involved 8 sites at a total consideration of $39.9 million; key capabilities acquired included equipment, inventory, and vital intangibles (trade name and customer relationships) which generated $21.4 million in goodwill and expanded mobile and insurance offerings in the U.S. auto glass market. |
Jack Morris Auto Glass Acquisition | 2022 | Completed on July 27, 2022, this deal acquired 9 sites for $54.9 million; the acquisition’s assets—comprising cash, equipment, inventory, receivables, trade name, and customer relationships—resulted in $35.708 million in goodwill, reinforcing the company’s auto glass footprint. |
Auto Glass Fitters Inc. Acquisition | 2022 | On September 8, 2022, the Auto Glass Fitters Inc. deal was completed involving 24 sites for a total consideration of $70.8 million; assets acquired included vehicles, trade name, customer relationships, and other resources, culminating in $49.009 million in goodwill. |
Auto Glass Now (AGN) Acquisition | 2022 | Although executed on December 30, 2021, this acquisition (reported in 2022) involved 79 sites in the Paint, Collision & Glass segment for an aggregate cash consideration of $170.6 million; the deal delivered diverse assets, net assets valued at $50.968 million, and generated $119.668 million in goodwill, strategically bolstering Driven Brands’ entry into the U.S. auto glass market. |
Recent press releases and 8-K filings for DRVN.
- Q1 2025 Results: Achieved $516M revenue (up 7.1% YoY) with 17 consecutive quarters of same-store sales growth; reported net income of $6M and adjusted net income of $44M .
- Debt Reduction: Completed a $385M U.S. Car Wash sale, with nearly $290M used to repay debt and targeting net leverage of 3x by end of 2026 .
- Leverage Metrics: Reported a net leverage ratio of 4.3x based on Debt Agreement Adjusted EBITDA of $578.3M and net debt of $2,496.5M .
- Segment Performance: Take 5 Oil Change achieved notable sales growth while International Car Wash delivered 26.2% same-store sales growth with improved margins .
- Financial Reconciliation: Provided detailed Q1 2025 financials covering net loss, interest expense, depreciation, and adjustments for acquisition costs, non-core items, and share-based compensation .
- Operational Updates: Noted impacts from U.S. car wash operations and store opening/closing activities, completed the divestiture of the U.S. car wash business in April 2025, and reaffirmed the FY2025 outlook .
- Leadership Transition: CEO Jonathan Fitzpatrick steps down to Chair as Danny Rivera assumes the CEO role, ensuring continuity in a dynamic environment .
- Driven Brands Holdings Inc. announced the closing of its U.S. car wash business sale to Express Wash Operations, LLC (dba Whistle Express Car Wash) on April 10, 2025.
- The transaction was valued at approximately $385 million, comprising $255 million in cash and a $130 million interest-bearing seller note.
- Proceeds will be used to reduce debt as the company targets a net leverage of 3x or less by the end of 2026, and the car wash results will be reported as discontinued operations for fiscal 2025.
- Overview of business segments: Driven Brands detailed its focus on the Take 5 Oil Change business as a key growth engine alongside a strong portfolio of franchise brands and an international car wash operation, emphasizing accelerated unit growth and robust cash flow generation.
- Expansion strategy and franchise mix: Leadership highlighted efforts to achieve a balanced 50/50 split between company-owned and franchised locations for Take 5, supported by a strong pipeline of approximately 1,000 new locations over the next 3–5 years.
- Strategic asset reallocation: The company announced a definitive agreement to sell its U.S. car wash assets due to market volatility, while underscoring the stable and predictable performance of its international car wash business.
- Driven Brands Holdings Inc. entered into an amendment to extend its revolving credit facility, maintaining an aggregate commitment of $300 million with maturity extended to February 27, 2030 (with a possible springing maturity on September 18, 2028).
- As of February 27, 2025, the company had $155 million of borrowings outstanding under this Amended Credit Agreement, which includes interest rates of the Term SOFR Rate plus between 2.00% and 2.25% and a commitment fee of 0.375% on unused commitments.
- Q4 2024 Financial Performance: Driven Brands reported $564 million in Q4 revenue and $2.3 billion in fiscal 2024 revenue, with 2.9% same-store sales growth and 70 net new stores .
- CEO Transition: Jonathan Fitzpatrick will step down—with COO Daniel Rivera set to assume the CEO role effective May 9, 2025 and further details to be discussed at the Q1 2025 earnings call .
- Strategic Divestiture: The company announced the sale of its U.S. car wash business for $385 million (targeted for Q2 2025) to reduce debt and sharpen its focus on core brands, including realigning efforts around the Take 5 Oil Change brand .
- Adjusted EBITDA & Financial Health: Q4 operations delivered $130.7M in Adjusted EBITDA and ended with a Net Leverage Ratio of 4.4x (Total Debt: $2,693,544K, Cash: $169,954K, Net Debt: $2,523,590K), reflecting ongoing debt reduction efforts .