US car wash operator Spotless Brands explores sale, sources say

By Abigail Summerville

NEW YORK (Reuters) - The owners of Spotless Brands are exploring a sale that could value the U.S. car wash operator at nearly $3 billion including debt, according to four sources familiar with the matter.

The company is working with investment bank William Blair on the sales process, said the sources, who cautioned that no sale of Spotless was guaranteed and spoke on condition of anonymity to discuss confidential deliberations.

Investment firm Access Holdings established Spotless in 2020 and contributed further capital in 2023 as part of a $600 million fundraising round in which Wafra Inc, an investment firm backed by Kuwait's public pension fund, acquired a minority stake in Spotless.

Spotless, Access Holdings, Wafra and William Blair did not immediately respond to requests for comment.

Spotless operates around 200 locations across 10 states and Washington, D.C., according to its website, with its brands including Bluebird Express, Cobblestone Auto Spa, Epic Shine, Flagship Carwash, Okie Express Auto Wash, and Ultimate Shine Car Wash.

The company generates around $200 million of annual earnings before interest, taxes, depreciation and amortization (EBITDA), the sources said.

Other companies in auto servicing could be attracted to Spotless, while private equity firms have traditionally been major investors in car wash platforms, the sources added.

KKR's purchase of an $850 million stake in Quick Quack Car Wash last year was among recent notable deals in the sector involving buyout firms.

Given the industry's fragmented nature, private equity firms can grow portfolio companies quickly through the acquisition of smaller car wash operators. This allows them to create larger businesses, even before applying operational changes to boost profitability.

(Reporting by Abigail Summerville in New York; Editing by Jamie Freed)