Crain’s Detroit Business: Private equity suddenly loves car washes, and its latest darling is coming to Michigan
A growing car wash chain is looking to clean up in Southeast Michigan with dozens of new locations planned in the region.
El Car Wash, based in Miami, through a local developer has tied up around 50 sites for new car washes from Detroit to Flint to Lansing by either placing them under contract or having already purchased them, its founders said.
But beyond the addition of a new chain to the region, El Car Wash’s entry to the market also is another marker in a growing trend of big investors such as private equity companies rolling up a traditionally mom-and-pop industry into large chains…
…”When subscription models were introduced in recent years, that created a more stable revenue stream that became attractive, said Michael Kell, managing partner of Thornlea Capital, another Birmingham-based private equity firm invested in the Jax Kar Wash deal with TRP.
“Any time you’ve got good margins and predictability of revenue and cash flow, that starts to be very attractive to private equity,” Kell said.